By SmartMoney Staff
Question: I read all the time about what asset allocation you should have 20 or 10 years from retirement, but what about once you’ve retired? Are there “after retirement” mutual funds?
– Bill Shape, Sequim, Wash.
Answer: You’re right — asset allocation shouldn’t go out the window in your retirement years. While there’s no cookie cutter formula, experts recommend striking a balance between conservative, income-generating investments and equities that can help keep up with inflation. With the former, look for shorter-duration bonds and certificates of deposit, so you don’t lose out when interest rates rise, says Ray Harrison, a Roseville, Calif.–based wealth adviser. As for mutual funds, experts suggest income-focused funds with managers who invest in all areas of the market, rather than target-date funds that usually adhere to specific allocations.
For More Information:
- Retirement Asset Allocation Calculator
- How to Rollover a 401(k)
- How to Manage Your 401(k)
- The True Cost of Your Bucket List
- 10 Costs That Can Ruin Your Retirement Savings
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