What is a Retirement Portfolio?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 26 August 2019
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A retirement portfolio is a mixture of investments people use to grow funds to cover their retirement needs. In a number of nations, the government encourages citizens to plan for retirement, and it may offer special tax benefits for retirement investments. People preparing for retirement can ask accountants and personal finance advisers about the options available to them and may want to consider adjusting their investments to qualify for benefits like tax-free status for retirement investments.

People can start building a retirement portfolio at any age. In fact, starting as early as possible is a good idea, as it provides more opportunities for growth. The key characteristic of a retirement portfolio is a mix of reliable investments to distribute risk. In the earlier years of building the portfolio, people may select more risky investments with high returns to build up the base quickly. As they approach retirement, they can shift the balance of their assets to more reliable investments with lower returns, like government securities.


Planning a retirement portfolio involves thinking about financial needs later in life. People have to consider when they would like to retire and how many years they can expect to live after retirement, and should weigh this information with the cost of living for the lifestyle they want. Accounting for inflation is important, as this can eat into retirement funds more quickly than people intend. People may also need to balance tax concerns when planning a retirement portfolio, such as not investing more than a set amount a year to avoid tax penalties.

Financial advisers can help people decide how much to invest and may assist people with budgeting to control current expenses with the goal of having more money to set aside in a retirement portfolio. They can also discuss retirement strategies like when to buy a home and how to manage assets so they will last through retirement. People may have multiple investment needs, such as wanting retirement income while also wanting to save money to pay for their children or grandchildren to attend college, and these can be an important consideration as well.

Some people may manage their investments directly, buying stocks, bonds, and other securities to set up a retirement portfolio. Others may choose to invest in funds, providing access to pooled investments under the management of an expert. People can also include a mixture of investment strategies, or turn the creation and management of retirement portfolios over to brokers and other representatives who can look out for their interests and build a portfolio appropriate to their needs.


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