1 of 5

Write now Article Tools

To fine-tune your investment portfolio for retirement, make an effective retirement planning. It is not just enough to replace your paycheck with a fixed income. You should create a dependable income for the rest of your life.

Step 1
RE-DEFINE GOALS.

As you get closer to retirement, your goals shift from high
returns to good income and stability. Make investment

changes to match shifts in goals.

Expect to outlive the Rule of Averages' in your retirement
planning. Account for inflation and changing income needs.

Follow the path of prudence. Cut down risks, and
generate life-long incomes from varied sources.

Step 2
REVIEW PORTFOLIO

Is your portfolio well-diversified ?
Does it contain a judicious mix of investments?
Are they tax-deferred ?
How liquid are your investments ?
What is the percentile of high-risk investments ?
Do you have money tied up in investments that you'd rather
sell now ?

Step 3
DIVERSIFY

You will sell stocks periodically to gain more income. So go
for a well-diversified portfolio that will always give you
something in a good position to sell, as and when you need to.

Diversify over different asset classes. Re-schedule your
investments with different levels of volatility. Spread risks
by favoring mutual funds over individual securities, index
funds over stocks.

Step 4
ASSET RE-ALLOCATION

Asset allocation is the first step in creating a diversified
portfolio. It decides how your investments should be
allocated among broad classes like stocks, bonds and liquid
investments. Different classes of investments show different
rates of return and varying levels of price volatility.
Likewise, different asset classes respond differently to
trends and news.

Use the strategy of 'insured asset allocation' to find a
suitable base policy mix' or fix a portfolio value under
which it should not drop. This will assure a minimum standard
of living even after retirement.

Step 5
MATCH YOUR RISK-TOLERANCE TO INVESTMENTS

The investment portfolio should be fine-tuned to your risk
profile. Your tolerance for risk is Dependant upon various
factors like, goals, time-lines, age, status of health,
personality, investment knowledge and experience.

Step 6
PHASE OUT

Adopt a long-term planning. Know the right time to sell
during retirement. Plan to sell those investments that are
low in liquidity, like philatelic and art investments, which
take time to get right prices.

Step 7
MAKE PROVISION FOR A SAFETY NET

Balance your portfolio to have cash investments that provide

• 1
• 2
• next page >>

Add your voice

Know something about Fine tuning your investment portfolio for retirement?
We want to hear your view. Write now!