photo by Rick Brotherton

When it comes to building a retirement portfolio it is important to take a comprehensive look at all your investments and organize them into a collective portfolio. This will ensure that your long-term objectives and risk tolerance are truly in line with how you are currently saving for your retirement. The following article discusses three main things to keep in mind when preparing for retirement.

Things To Consider When Building Your Retirement Portfolio

Article taken from Investing Toolkit

#1 Put Your Retirement Plan in Writing

It is important to begin by assessing your expected retirement needs, anticipated lifestyle, and current assets. Before you can adequately evaluate the essential components you will need to build your portfolio, you have to know where you are beginning and what your final goal is. Let’s take a look at the major components that make up a retirement portfolio:

• Pension
• 401k
• IRAs
• Stocks, bonds, mutual funds, certificates of deposit, and treasuries
• Real estate
• Social Security Income

You may well have some of these items in place. So to start out, you need to take a written inventory of what you have in place. This will give you your starting point for your map to retirement freedom.

#2 Know Your Financial Goals

Once you know what your starting point entails, you can decide what you will actually need to have in place to achieve your retirement goals. There are certain items that should be put in place as quickly as possible.

If your employer offers a pension or 401k program, especially if they provide fund matching, you should absolutely - at the very least - participate up to the match point. This is a way to immediately double your investment. Find out if you qualify for an IRA; in particular, check into the Roth IRA. There are many benefits specific to the Roth, including the fact that all contributions can be withdrawn at any time tax free as the contributions are made after taxes.

#3 Save For Competing Goals

Before saving for retirement, make sure you have higher priority financial goals addressed such as saving for things you may need for the shorter term. For instance, save for an emergency fund by keeping around 6 to 9 months’ worth of expenses in a safe, liquid account.

Also, if you are renting a home, it is wise to save up towards purchasing your own home. Instead of throwing money away on rent, you will be building equity in something of your own. There are also several tax benefits that go along with home ownership, including tax-deductible interest and a one time capital gains tax exemption if you sell.

Other common goals to save for include your children’s (or future children’s) educational funds. But take note that if you have to decide between saving for retirement vs your kids’ college education, you should prioritize towards retirement saving and investing.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions.  Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy.  All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice.  This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.  Past performance is not a guarantee of future results.