8 Things To Do During Your First 30 Days Of Retirement. Here are 7 things to consider doing, and in some cases not doing, during their first 30 days of retirement. Therefore, take some time to communicate your initial plans for retirement including the fact that you won’t be making any major decisions regarding downsizing, moving, taking on a major renovation, making a large gift to a community foundation or family member, or locking in a set day and time to watch the grandkids every week. But life in retirement isn’t any different than everyday work life. There are people and situations that will stress you out. Whether it’s money, a nosey neighbor, or friend who’s always gossiping about others, take a moment to think about the things that cause the most stress in your life and begin to research and talk to others about strategies to address them. 7) Get Physically Active Some people assume that retirement will finally offer them the time, energy, and motivation to start exercising and eating better. Therefore, it’s crucial during these first 30 days that you develop some sort of exercise routine. It may be a Flexible Spending Account (FSA) or Health Savings Account (HSA). Overall, entering retirement is a privilege that some people never get to experience.
The best asset allocation strategy for retirees isn’t a one-size-fits-all formula. There are several variables that determine your ideal stock/bond/cash allocation, such as your age, risk tolerance, and more. Here’s a quick guide to help you determine the optimal allocation for your 401(k), IRA, and other retirement accounts.
1. Learn the basic concepts of asset allocation
Asset allocation refers to how much of your investment portfolio should be invested in stocks (equities), bonds (fixed-income), or cash-based assets.
The general idea behind asset allocation is that stocks offer the best long-term growth potential, but can be quite volatile over short time periods. On the other hand, bond investments can be excellent tools for preserving your capital, but offer relatively limited return potential. Finally, cash assets are risk-free, but also earn very little returns.
As we’ll see, asset allocation is about finding the appropriate mix of risk and return potential for you.
2. Using your age, approximate your ideal stock/bond mix
Notice that I didn’t say stock/bond/cash mix. Even in retirement, I generally discourage people to keep more money in cash than they need for their near-future living expenses. I’m of the opinion that all of your savings should be earning something, and there are bonds that aren’t much riskier than cash (short-term Treasuries for example) but pay significantly more than most savings accounts.
With that in mind, here’s a good rule of thumb to estimate your ideal asset allocation. Simply take your current age and subtract it from 110 to find the percentage of your assets that should be allocated to stocks, with the remainder invested in fixed-income assets. For example, if you’re 70, this implies that about 40% of your investment assets should be based on equity and 60% on fixed-income investments.
3. Evaluate your own risk tolerance
Could you deal with your portfolio dropping by 50%? The stock market has done that before, and may eventually do so again, so as a rule, don’t invest any money in stocks if you wouldn’t be comfortable with it being subjected to this kind of volatility. However, the fixed-income portion of your portfolio can help to offset (but not eliminate) this risk during tough times.
To be clear, all investing involves risk, and markets will fluctuate. The point is that your portfolio should be designed to keep your volatility at a relatively low level for the amount of income and growth you hope to achieve.
Therefore, the next step is to evaluate your own risk tolerance. Using your age-based allocation from step two, adjust accordingly if you feel that you have a higher or…