Content provided courtesy of USAA.
Conventional wisdom says the older we get, the more conservative we should become with our investment accounts.
But only up to a point.
"Being too cautious can be as bad as taking big risks," says Robert Steen, director of retirement advice at USAA. "If you're dependent on investments to cover your expenses, being too conservative could come back to bite you."
Finding the optimum mix for your portfolio is a balancing act. In the ever-changing market landscape, Steen says a 50-50 split between stocks and bonds or other "safe" investments may be a route to consider as you start your retirement countdown.
"If your portfolio is 100% invested in stocks, you may want to review it at age 50 and reallocate some of your retirement portfolio into more stable investments like money market funds, bonds or bond funds of shorter duration and higher quality, and fixed annuities," he says. "At this stage in life, it's time to start positioning your investments to create income that you won't outlive."
Then, when you are a few years away from retirement, do some fine-tuning, depending on your retirement needs and goals. Be sure that you review not only your personal brokerage accounts but also your IRAs and 401(k)s.
Steen also recommends that you consider the following steps: