Learn how to maximize your investments for retirement planning in your last five years of working.

Three Retirement Planning Tips for Your Last Five Years of Working

You’re five years from your anticipated retirement date, and things are looking pretty good. You can look back over a satisfying career, and you have plenty of retirement plans to look forward to. From travel to more time for hobbies, you’re expecting to have a lot of fun enjoying the fruits of your labor. Even if things are looking great, are there retirement planning strategies you should be utilizing, particularly in your last five years of working?

While you’ve saved and you’re thinking that you’re nearing your magic number for a comfortable retirement, it’s not the time to coast into the finish line. Here are three key strategies you should consider for the end of your career:

Reevaluate your equities portfolio. You’ve worked hard to put money away over several decades, but you can experience a major mistake even in just the handful of years you have until retirement and those few years after you retire. You may have heard that you should keep the bulk of your investments in equities, in order to get the best return. As you near retirement, you may want to go over your investments with your advisor to decide if you need to reduce your equities.

Determine whether you can withdraw less than 4%. Retirees are often advised to withdraw 4% of savings their first year and make an adjustment for inflation. Because of low yields, that amount may be too aggressive. Talk to your advisor about your options. (You may want to consider approaching it another way by spending less when there’s a more challenging market year). The takeaway here is that talking to your advisor may be a better step than doing “what everyone does” or what you’ve heard they’re doing.

Think about where your assets will thrive. If you’ve maximized contributions to IRAs and your 401(k), choose taxable accounts that are the most tax-efficient. It may surprise you what options are available – especially since the tax world is constantly changing. (Let it be your advisor’s job to keep up … and your job to enjoy the confidence that comes from that).

But you’re thinking now isn’t a great time to invest. Tom Sudyka, Portfolio Manager, has something to say about that. “Ken Kroeker, a Lawson Kroeker co-founder, is always fond of saying, ‘Now is always the hardest time to invest.’ It doesn’t matter what’s going on in the economy, or what’s going on in the stock market. It’s always hard. The trick is to stay in the market as often as you can with companies you know and understand,” says Tom.

Take a moment to learn more about our philosophy. Or, just send us a note. Now is always a great time to talk about what’s on your mind for your future.