retirement planning

Risk tolerance is a term you may have heard about when determining your investment strategy. While you might picture activities such as rock climbing or jumping out of an airplane when you think of risk, it has a different meaning when it comes to investing.

You just started a new job and have come across information about your company’s 401(k) in your benefits paperwork. You may be wondering what exactly it is and whether you should sign up. The 401(k) plan got its name from the portion of the IRS tax code that governs its use. In the past, most employees received guaranteed monthly retirement income through an employer-funded pension plan.

Adequate insurance coverage is the foundation of a sound financial plan. No matter how well your investments perform, an unforeseen emergency such as a fire, theft or natural disaster may leave you completely unprepared not only to meet the financial needs of your retirement, but your immediate needs as well.

Many people mistakenly assume that the time for owning stocks is over once they hit retirement. But such blanket statements are not true for everyone. There are a variety of factors that should affect how much of your portfolio, if any, should be devoted to equities during your golden years. Here are some factors to keep in mind:

You probably already have homeowners and auto insurance. But there are many other types of policies that can help safeguard you and your family from unforeseen financial disasters. Speaking to a qualified insurance agent and reviewing your coverage and personal circumstances is a prudent course of action to help ensure that you and your family have adequate protection.

Americans turning 65 now have about a 70% chance of needing long-term care in the future. You might assume that Medicare will pay for all your long-term care needs, but you’d be wrong. Medicare does provide some benefits, but only under very specific conditions.

So What Does Medicare Cover?

One of the prime risk protections for your nest egg is time: Time to recover from market downturns. But what about once the sun sets on your working years and rises on your golden years? The first thing you have to remember is that there are different kinds of risks — aside from those posed by financial markets.

Risky Business

Determining an appropriate mix of investments and matching those choices to your retirement goals is a keystone of successful retirement planning. If your eyes glaze over when someone starts talking about asset classes, diversification and allocation, you’re not alone. Here’s a quick guide:

What Is an Asset Class?

Estate planning can be simple or complex depending on your particular circumstances. However, there are certain basic documents that everyone should consider preparing to ensure their wishes are carried out should they become incapacitated and in the event of their passing.