Dear Valued Client,
This is the final article in my Retirement Planning series. To recap, article 1 we discussed having the right retirement plan that is best for you. In Article 2, I spoke about having the proper allocation in place. In this installment, I focus on the importance of implementing and continuously monitoring your plan to achieve your goals.
After you have created your investment allocation, we have the tools and resources available to help manage your accounts. In this article, I will discuss the three R’s: Review, Rebalance, and Refine.
1. Review your portfolio
The market environment changes constantly, which can cause any long-term plan to go off course. To keep your investments on track, it is wise to set aside time to review your portfolio on a regular basis. A review is especially important if you've had any major changes in your life—retirement, job change, getting married, welcoming a new child or grandchild, purchasing a house—so that you can evaluate your existing portfolio and make any necessary adjustments to your accounts.
Questions to Consider During Your Review
2. Rebalance your portfolio
You allocated your initial portfolio among different types of investments—stocks, bonds, alternatives and cash—to reduce overall risk in your portfolio. But over time, the percentages you have allocated to each type of investment may have shifted due to market swings, leaving your portfolio looking much different than your original plan.
Rebalancing gets your portfolio back to your desired percentage mix. This simply means that you will need to buy and sell investments to bring your portfolio back in line with your asset allocation plan (see below). This ensures your portfolio maintains the balance of risk and return that you have determined is right for your goals.
Rebalancing in Action
3. Refine: Make changes to your portfolio
Sometimes you need to add or replace investments for further diversification in your portfolio, or perhaps you need to overhaul your portfolio as a result of a major life event or shift in your financial goals. Before making changes to your portfolio, consider:
I hope these three articles have helped educate you about what it takes to have a solid retirement plan in place. Having a thorough plan will prevent you from making costly mistakes.
You have less than 40 days to complete your taxes for April 17th deadline. Please speak with your CPA or tax professional to find out the amount you can contribute to your retirement plan before the deadline. Be Proactive. Don’t rely on social security, or company pensions, because they may not be available when you retire. Do not be in the category of the 78% of Americans who do not have a retirement plan. Create a plan and take the necessary steps to position yourself for financial freedom.
Please contact me today at 212-785-4377 x224 for your retirement reality check.
John J. Fiorito
Securities offered through Dinosaur Securities, LLC Member FINRA, SIPC, NFA.
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