Five Retirement Investing Tips

Making appropriate investments can help increase the likelihood of having a financially secure retirement. Here are five tips that can help you make smart decisions as you invest and plan for the future.

• Look beyond returns. Instead of worrying about which investments will perform the best, make sure you have the right mix of investments to meet the following needs:
  • Short-term liquidity.
  • Long-term income.
  • Security.

As part of your financial strategy, identify how much you need to allocate to each of these areas based on your financial situation and goals. Then look for the best investments within each area that align with your risk tolerance and time horizon.

• Focus on your goals. The markets will continue to go up and down. Instead of focusing on ways to avoid short-term volatility, focus on your goals and the amount of time you have to achieve them. Then adjust your investment choices accordingly. Remember that a well-diversified portfolio can help you mitigate market risk.

• Track what you spend. Understanding where your money is going is critical to successfully managing it, especially if you are on a fixed income. It enables you to identify necessary and unnecessary expenses and can help you manage both so that your spending doesn’t put your future financial security at risk.

• Make smart money decisions. It’s natural to want to help out your children or other relatives who may approach you for a loan. Yet, often that money is never repaid. So, evaluate whether or not you have the resources to give that money as a gift — because despite best intentions, that may be what your “loan” becomes. If you don’t, determine whether helping out will truly be in your best interest over the long haul.

• Build a team. At some point, you may be unable to independently manage your investments and other aspects of your financial life. Now is the time to choose and groom a trusted family member, a friend or a professional who can look after your best interests should this day come. Take time to help them understand your expectations and financial goals. It’s better to find someone sooner than later. If you wait, by the time you need assistance it may be too late.

Scott Berman is a Financial Advisor and Managing Director at Berman & Associates, a financial advisory practice of Ameriprise Financial Services, Inc.  Advisor is licensed/registered to do business with U.S. residents only in the states of CA, CT, DC, DE, FL, KY, MD,ME,MO, NC, NJ, NY, OH, PA, SC, TN, VA, WA, WV.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.

© 2011 Ameriprise Financial, Inc. All rights reserved.