Change Investment Style, Plan for Large Expenses

As you near retirement, preservation of income may become more important to you. Keep in mind:

Your time horizon—the years until you will need to begin withdrawing money from your retirement investments—is getting shorter and you and your advisor may want to consider adjusting your asset allocation to better protect capital while continuing to generate some growth of that capital. And, now also may be the right time to consolidate some of your accounts. That way, you and your advisor can more effectively manage your retirement savings once you leave the working world.

Plan for Large Expenses

Do you plan to purchase a new home once you retire? Do you have children in college or older parents who require special care? It's important that you protect your retirement savings from these expenses. However, if you must tap your retirement plans for certain expenses, budget for them as early as possible.

  • If your children will be in college when you retire, be sure to take advantage of a 529 plan, which offers tax-advantaged savings for higher education
  • Any big lifestyle change you have planned for retirement—travel, a new home or new career— should be carefully planned. For example, buying a larger home could reduce your savings, while a smaller home may give your retirement savings a boost. Budget for big expenses now, so that you have a good idea of how far your savings will really take you once you reach retirement
Next Steps
  • Schedule an appointment with your financial advisor to discuss what your best course of action.        

This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice, or for use to avoid penalties that may be imposed under U.S. federal tax laws. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.

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