Countdown to retirement: One year to go
No. 6: Dial back investment risk in retirement plans
The recent financial crisis showed that the risk of a major downward movement of the market just before retirement is all too real, says Jeffrey Sica, president and chief investment officer of Sica Wealth Management in Morristown, N.J. Surrendering 15 percent, 20 percent or even 25 percent of the value of your retirement portfolio in the year before you retire can torpedo the best-laid retirement plans. It can result in having to postpone retirement or cutting back on the post-retirement lifestyle.
That's why it makes sense to revisit asset allocation in your company retirement plan, says Murray. "Become more conservative in your company retirement plan," he says. "You don't want a major market decline to set you back financially."