How Much Risk Should You Take in Retirement?

The amount of risk you should take with your investments in retirement is a complex question with no one-size-fits-all answer. It depends on a variety of factors, including your age, risk tolerance, financial goals, and the amount of savings you have.

Key Considerations:

• Risk Tolerance: How comfortable are you with market fluctuations? A higher risk tolerance might allow for more aggressive investments, while a lower tolerance may favor more conservative options.
  
• Time Horizon: The longer before your retirement, the more time you have to recover from market downturns.
  
• Income Needs: If you rely heavily on your investments for income, a more conservative approach might be necessary to protect your principal.
  
• Asset Allocation: Diversifying your investments across different asset classes can help manage risk. A balanced portfolio can provide a mix of growth and stability.
  

If you retire early, before age 65, you might need to maintain a higher level of risk to generate a sufficient combination of growth and income throughout retirement. As you age, you may become more risk-averse and shift your portfolio towards more conservative investments.

Consulting with a financial advisor, like Hendricks Wealth & Estate Management, can help you determine an appropriate level of risk for your specific circumstances. They can assess your financial situation, risk tolerance, and goals to create a personalized investment plan.

Hendricks Wealth & Estate Management will be speaking further on this topic during a FREE “Don’t Do Dumb” webinar on Wednesday, September 18, 2024 at 5:30 p.m. CST. To reserve your spot or learn about future “Don’t Do Dumb” financial sessions, visit www.jghfs.com/events. Questions? Call us at 847-428-3997.

Services are offered through J.G. Hendricks Financial Services, LLC dba Hendricks Wealth and Estate Management, a Registered Investment Adviser.  This article is for informational purposes only, and not intended as advice regarding any specific investments.

Hendricks Wealth & Estate Management

650 Spring Hill Ring Rd., Ste. 2000

West Dundee, IL 60118

(847) 428-3997

www.jghfs.com