Steps To Develop Your Retirement Investment Strategy

Retirement Investment Strategy

Everyone who wants to retire some day should have a retirement investment strategy.  It sounds very important, what is it?

Your retirement investment strategy is your financial foundation.  It is your plan and your method for achieving your retirement  goals.

Like any strategy, through a series of moves its purpose is to get you to an ending.

If you develop a retirement investment strategy, implement it and stick to it;  you will be prepared for retirement.   Retirement is too important to not be prepared for it;  you could spend 20 years of your life in retirement.

Your retirement investment strategy is not a one time exercise but instead it is a process.   You do not create this strategy and then put it on the shelf.   It is a work in progress.   You will adjust it, change it and massage is as things in your life change.

Your Retirement Investment Strategy:

Step #1 – Establish Your Retirement Priorities.

  • Before you start, you need to know where you want to end up.
  • Establish your financial priorities as early in your career as possible.
  • The earlier you start your retirement investment strategy the longer you will have to perfect it.
  • What are your priorities?
  • Do you have retirement priorities?
  • What are your personal financial goals?
  • Is your goal to retire early, retire but work part-time, retire before your brother-n-law, retire and start a business, retire and golf every day, retire and travel?   The list is endless.
  • Have you established your retirement priorities?

Step #2 – Establish Your Financial Plan.

  • After you have determined your retirement priorities, you need to develop a financial plan.
  • You may want to seek the help of a financial planner to develop your financial plan.
  • A financial plan is your road map.
  • You wouldn’t plan a trip without a road map; so don’t plan your retirement without a road map.
  • The purpose of a financial plan is to get you to your destiny.
  • You will need to know how much money you will need to save today to retire tomorrow.
  • Through retirement calculators and other financial tools, a financial planner can help you determine the amount of money you will need to achieve the type of retirement you have in mind.
  • The financial plan may include a budget.
  • A budget helps you stay on target and will keep you focused.
  • A budget gives you parameters to work within.
  • Go outside the parameters of your budget and you have to adjust or cut back.
  • It’s not what you make but what you keep that matters when planning for your retirement.
  • All of your financial information gets input into a retirement calculator to help you build your financial road map.

Step # 3 – Your Investment Profile.

  • Your investment profile reflects your investment preferences.
  • Do you like high risk or conservative investments?
  • Do you like stocks or bonds?
  • Large cap or small cap funds?
  • Mutual funds or individual stocks?
  • Those questions make up your investment profile.
  • Get to know your profile and live within your profile.
  • Your profile incorporates the risk level you are willing to tolerate with your investments.
  • Make sure your level of risk matches the investments you are in.
  • If you are more comfortable with conservative investments, that’s okay.
  • Stick with your investment profile otherwise you make investment decisions that you are uncomfortable with.
  • If your risk does not match your investment selection, reallocate your assets so it does match.
  • You cannot have a wrong investment profile.   Your profile is who you are as an investor.

Your Financial Profile.

  • This profile looks at your insurance needs.
  • Are you properly insured?
  • Do you have enough life insurance, disability insurance and long-term care coverage?
  • Work with your financial planner to fill in any gaps that may exist.

Your Review Process.

  • Part of an investment strategy is a review process.
  • Review your investment strategy, investment and financial profiles at least once a year.
  • Your needs change as your life changes.
  • When you are single your risk tolerance levels are different than when you get married.
  • When you are younger your risk levels may be more on the risky side and as you age, you may become more conservative.
  • Your annual review will adjust for these changes.
  • If the economy damages your investments, you may have to change when you can retire.
  • You need to review your investment strategy to stay on track.

Your retirement investment strategy will help you get to retirement.   Find a financial planner you trust.   Use a retirement calculator to get started.  The earlier you start planning for retirement in your career, the better.


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