Retiring with no plan for income
Retirement is a gradual process that involves some planning. Ideally, people begin to transition their portfolio into retirement mode years before they actually hang up their working hats.
Throughout their career, workers have lots of time to save money and wisely invest in a range of assets. As retirement nears, the mix of investments needs to change, moving away from growth in accumulation toward a distribution and preservation stage.
"They need to rebalance their portfolio to make sure their risk tolerance is reflective of their age and timeline to retirement," says Nancy Coutu, CFP professional and principal of Money Managers Financial Group in Oak Brook, Illinois.
That usually means scaling back equity exposure and increasing the amount of bonds in the portfolio.