As you enter your 60s, your investment strategy may need to be adjusted to align with your retirement goals and risk tolerance.
Whether you're nearing retirement or already enjoying your golden years, making informed investment decisions is crucial to secure your financial future.
Here are six essential tips to help you navigate the investment landscape and make the most of your assets in your 60s.
Steal this billionaire wealth-building technique
The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.
A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.
If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)
Take a second look at your retirement plans
As you approach retirement age, it's essential to review your retirement plans, including your 401(k), IRA, and pension accounts.
Evaluate your projected income needs, expected expenses, and retirement timeline to ensure your investment strategy aligns with your retirement goals.
Consider consulting a financial advisor to help you create a comprehensive retirement plan tailored to your needs. Life circumstances and financial goals may change, so periodic reviews of your retirement plans are crucial to keep them aligned with your objectives.
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Re-evaluate your asset allocation
In your 60s, it's prudent to shift your asset allocation toward more conservative investments to protect your savings from market volatility.
Review your investment portfolio and consider reallocating some of your assets from growth and small-cap stocks to reliable, dividend-paying stocks.
Balancing risk and return becomes increasingly important as you approach retirement to preserve your wealth and generate income.
Keep in mind that while conservative investments offer stability, maintaining a diversified portfolio can help mitigate risk while potentially capturing market opportunities.
Don’t ignore catch-up contributions
If you're behind on retirement savings, take advantage of the 2024 $7,500 catch-up contribution limit the IRS allows for individuals aged 50 and older.
Anyone can contribute up to $23,000 to their 401(k) plan, so for individuals aged 50 and older, that's a total of $30,500 for tax year 2024.
Catch-up contributions can significantly boost your retirement savings and help you reach your financial goals faster. You can bridge the gap between your savings and your desired retirement nest egg by leveraging catch-up contributions.
Get a free stock valued between $5 to $200
Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.
Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.
Let’s say you want to invest $250, as an example.
With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.1
Even better news? Add a Robinhood Gold membership, and you’ll get access to 5.00% APY2on your uninvested cash3and the ability to buy and sell stocks 24 hours a day, 5 days a week.
Open and fund a Robinhood account and earn up to $200 in stock
Max out retirement account contributions
Utilize tax-advantaged retirement accounts to their fullest potential by maximizing your yearly contributions.
Contribute the maximum allowable amount to your 401(k), IRA, or other retirement savings vehicles to take advantage of tax benefits and build a robust nest egg for retirement.
Consider automating your contributions to ensure consistency and discipline in your savings efforts.
Maximizing your retirement account contributions reduces your taxable income and accelerates the growth of your retirement savings, thanks to compounded interest.
Consider low-risk investments
As you near retirement age, consider prioritizing capital preservation and income generation by investing in low-risk assets such as bonds, CDs, and dividend-paying stocks.
These investments offer stability and regular income streams while minimizing the impact of market fluctuations on your portfolio.
Diversify your investments across different asset classes to reduce risk and enhance portfolio resilience. While low-risk investments may offer lower returns compared to riskier assets, they provide stability and protection of principal, which is crucial during retirement.
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Be aware of inflation
Inflation erodes the purchasing power of your savings over time, making it essential to account for inflation in your investment strategy. Consider choosing an investment that offers direct inflation protection, such as Treasury Inflation-Protected Securities (TIPS).
Regularly review your investment portfolio and adjust your asset allocation to mitigate the impact of inflation on your retirement income.
Additionally, consider investing in assets with growth potential to outpace inflation and maintain the purchasing power of your savings over the long term.
Bottom line
Don't let your retirement become an investment afterthought. Take action now to solidify your financial future.
By following these tips and consulting with a professional, you can craft an investment strategy that safeguards your nest egg, fuels your golden years, and creates the stress-free retirement you deserve.
Masterworks Benefits
- Invest in art like a millionaire for a relatively low cost
- Art investments have outperformed the S&P 500 by over 131% for 26 years
- Purchase shares of artwork by top artists
- Hedge against inflation and diversify your portfolio
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FinanceBuzz doesn’t invest its money with this provider, but they are our referral partner. We get paid by them only if you click to them from our website and take a qualifying action (for example, opening an account.)
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