As the market begins to improve, many of you may feel that it is okay to keep your retirement portfolio invested in the stock market, maybe to “make up” for the money you lost over the last few years. However, is that the best thing for you? What you really should be asking is “What should my investing strategy be, given the time I have until I retire?” During the recovery that followed the 2000-2003 downturn, many people saw the market upturn and decided to stay a little longer than they should have. The result of that was their having to work a few years longer, because the market had another downturn again in 2008. Sticking with the plan that is best for you may be much better than trying to out-guess the market in the hopes of adding a few more dollars to your bottom line.
RumboughSo what should your plan be? As you get closer to retirement, you should think about moving some of your assets over to safer investments. This gives you more stability, even though the returns may not be what you would hope for. When you think about how much you will have in your retirement “pocket” at the end of the day, a portfolio that is not as volatile many times gives you more than one that sports great returns in some years but terrible ones in others. If you are not sure when to start shifting your portfolio to safer investments, contact your CPA or financial advisor. They have seen many people go through this and can help you avoid mistakes in investing.
God expects us to be wise in our investment decisions. Getting advice from others can help you stay on track, and avoid the temptation of being too risky.
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.