3 Tips for a Less Stressful Retirement
As much as you may be looking forward to a fun and relaxing retirement, there can be a fair amount of stress once you get there. You'll be going from having a steady paycheck to suddenly having to live largely off of your investments and Social Security -- neither of which is a totally secure source of income. After all, the values of your 401(k), IRA, and brokerage accounts will fluctuate based on market conditions, and Social Security's future is somewhat shaky given that, if Congress does not act to shore up the program's revenues, benefit cuts will be required in only a few years.
The good news, however, is that a few simple moves on your part could make retirement much less stressful -- both in theory and in practice.
A stock market crash can hit at any time and send your portfolio's value plummeting -- and while that will always sting, the pain will be particularly sharp if it comes during a time in your life when you're drawing down on those investments to pay your bills. But with the right asset allocation, it should be less of an issue. While it's definitely wise to keep a fair share of your portfolio in stocks during retirement, they shouldn't constitute the overwhelming majority of your assets. As a general rule, stocks should account for between 40% and 60% of your portfolio during the early stage of retirement, and a bit less during its latter stages. If bonds -- which are far less volatile -- constitute a solid chunk of your investments, you may not have to worry as much when the stock market goes south.
Source Fool.com