Bulk Up Your Portfolio In Ten Years

Retiring in ten years or less means you have relatively little time to bulk up your portfolio

, especially if it has been clobbered by the bear markets and turned your nest egg into one that is probably going to be inadequate for retirement. This is a reality for many average American workers today (and the future for many retirees to come), but it does not mean that you should just belly up and accept the situation; you will have to realize a few things about your nest egg before you recheck your financial plans:

If you have a considerably smaller nest egg than you need or expect for retirement, you may have to postpone quitting the workforce because the returns from your investments are not likely to cover all retirement expenses. One of the most basic ways with which you can bulk up your portfolio is by aggressively saving more money by cutting down on everything but the most essential expenses while working beyond your projected retirement age.

What this does is extend the time you get the benefits of a regular paycheck while accumulating bigger retirement account balances, and decreasing the years you will spend in retirement and how long you will draw down from your retirement funds and nest egg.

Too small a nest egg in a short span of time should not push you into investing strategies that are too risky. Although it may be tempting to put a large part of your portfolio into stocks and speculative investments because of the significantly higher potential gains, there is also a good chance that you will suffer from investment losses. As you only have several years until retirement, there is hardly enough time to bounce back even if you could afford the losses.

On the other hand, an inadequate nest egg should not push you into investment strategies that are too conservative. While you may have thought about shifting much of your assets into fixed-income, low-risk investments, the gains will not be enough to add sizeable amounts to your retirement funds. Low-risk and low-yield investments should be a part of any diversified and well-balanced portfolio, but too much of it in assets could be as damaging to your finances as repeated investment loss.

There are many challenges facing the near-retiree today, such as market conditions that are hardly favorable for those who want to catch up on saving money for retirement. If you want to bulk up your portfolio in ten years or less, you will need to invest with manageable degrees of risk, delay retirement, and save more money.

by: Katherine Smith

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