Retiring in 2021? 4 Moves to Make Today
After working hard your entire life, you may finally be at a point where retirement is right around the corner. But retiring in 2021 won't be like retiring in any other year. That's because we're still in the midst of a pandemic, and that could have a serious impact on both your finances and your general plans. With that in mind, here are four important moves to make if you plan to retire in the coming year.
Ideally, you'll be leaving the workforce with a healthy chunk of cash in an IRA or 401(k) plan. But given the potential for a stock market crash in 2021, you'll need to make sure your assets are invested in a manner that doesn't expose you to undue risk.
While you certainly shouldn't dump your stocks completely going into retirement (you'll need to retain some so your portfolio continues generating decent growth), you should also make sure that at least 30% to 40% of your portfolio is in safer investments, like bonds (there are exceptions here, such as if you have multiple income streams, so this is really just a general guideline). That way, if stocks tank, you'll still be able to safely take withdrawals from your retirement plan without locking in major losses. Furthermore, if your risk tolerance is lower, you may want to have more like 50% to 60% of your portfolio invested conservatively.
Source Fool.com
