Think you're prepared for retirement and everything that goes along with it? A recent U.S. News article outlines ways that retirement may be a bit different from what you expect. Here are a few you might find interesting:
It can be particularly surprising to realize how important it is to focus part of your portfolio on growth investments in retirement.
Investing part of your portfolio in growth investments can help you keep up with inflation and rising costs through the years. Of course, growth investments entail some level of risk, so you should take care in tailoring your strategy to your budget and needs.
It is also essential to avoid emotional investing. It can be tempting to react to every change in the stock market and lose sight of the long-term goals you have set.
Experts suggest establishing an income "floor" — how much you'll need to cover the basics, such as food and shelter — at 40% to 50% of your pre-retirement income.
Having an income floor makes it less likely that you'll have to sell growth investments just to keep afloat. This floor can include many things, such as Social Security, a pension or an annuity.
Once you start taking withdrawals, your asset allocation should most likely be very different from what it was when you were in the accumulation phase. Your portfolio will not only need to generate income, but the consistency and stability of the returns must be monitored very carefully.
It's a good idea to work with a financial advisor to help keep you on the right track.
Retirees: What would you add to this list? What did you find most surprising?