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Robert L. Davis, CPA
Financial Advisor
Crystal D. Davis, CFP®
Financial Advisor
Davis Financial Services, LLC
Park Place Professional Center
5871 Allentown Road
Camp Springs, MD 20746
Phone: 301-702-9300
Website: www.davisfinancialsvcs.com
May/June 2020
Shifting Gears as Retirement Nears
How will you adjust your mutual funds* mix as you age? Consider the following fairy tale:
Just Right
Think about the story of Goldilocks and the Three Bears when adjusting the mix of your mutual funds.* Too much risk may be “too hot” for your retirement circumstances. This is when you need the money the most. Too safe may be “too cold” to keep your retirement accounts in sync with inflation. The “just right” mix of risk and potential reward is what you need to do your best to safeguard retirement income. It’s a process that will change with time.When you’re young, you can invest for potential growth because time is on your side to rebound from losses. Not so when you can count the years before retirement on one hand — and certainly not the case if you are already retired, when you want to protect what you have for current income.
Changing Approach
There are all sorts of formulas for how people should invest as they grow older, with rules of thumb dominating the conversation. You, however, are an individual with unique financial needs, so it is important to discuss your investment approach and what’s right for you with your financial professional.What’s certain is that most people should reduce their risk and attempt to preserve their savings near and in retirement. The landscape was littered with people who had to delay retirement after their too-aggressive investments went south during the 2008 recession. This may not mean putting every dollar into safer, low-return investments because you need to account for inflation, but you will want to line up your risk-reward mix with your circumstances.
*Investors should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. Contact the issuing firm to obtain a prospectus which should be read carefully before investing or sending money. Because mutual fund values fluctuate, redeemed shares may be worth more or less than their original value. Past performance won’t guarantee future results. An investment in mutual funds may result in the loss of principal.
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Davis Financial Services, LLC and LTM Client Marketing are unrelated companies. This newsletter was created by LTM Client Marketing and was not written or created by the named financial professional and does not necessarily represent the views and opinions of Avantax Wealth Management® or its subsidiaries.
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