At some point, we all want to stop working. We want to retire already.
Unfortunately, for many of us, even the thought of being able to retire has been pushed back again and again.
But there is one way to ensure that you can retire.
You just have to keep your nest egg well protected, especially in volatile markets. Some ways to consider when protecting your nest egg include:
No. 1 – Determine how much income you need
Paint a realistic picture of your potential spending habits going forward. For example, you’ll want to plan for the unexpected. Mulling over every possible scenario could help you figure out what you may need to withdraw from your nest egg to remain personally well funded.
Work on a comprehensive financial plan with an advisor. Part of that plan should include a realistic projection of how much money you may need to pull from your portfolio over a 10-year period.
No. 2 – Diversify Now
Remember, the types of investments you choose will always depend on how much risk you’re willing to take. If protecting your nest egg is important to you, your portfolio should also include cash and other liquid assets that can be converted to cash if need be. You may also consider having a cash reserve to pay personal expenses until the rest of your portfolio can recover from a potential market downturn.
Perhaps diversify with a mix of stocks, bonds, and cash savings. You may even consider short-term government bonds, as well as corporate bonds with short maturity dates and higher yields.
No. 3 – Never Allow Emotion to Guide You
When stocks fall, you impulsively want to pull all your money and run. Unfortunately, many investors choose to sell everything once a downturn gets underway. That’s a bad move that can be costly. You’re much better off staying the course even in rough seas.