I’m 65 Years Old and Going to Retire Soon. How Should I Structure My Portfolio?

I’m a 65-year-old preparing for retirement within the next three to five years. I’m looking at different types of retirement funds. Would adding stocks that are dividend-structured along with gold and cryptocurrencies be a good mixture?

-Earl

Shifting from building wealth for retirement to distributing wealth during retirement involves considering preferences related to your life and money. Those factors can include your risk capacity, risk tolerance, lifestyle preferences, longevity, needs, diversification and tax location. Retirement planning happens in stages, with a pre-retirement stage occurring over three to five years during which you begin adjusting your mindset, lifestyle and investments to fit your next stage.

(If you have additional questions about investing or retirement, this tool can help match you with potential advisors.)

How to Structure Your Portfolio

The structure of your retirement portfolio should reflect your needs, lifestyle, risk tolerance and capacity, and financial resources. Diversification across tax location, investment type, time horizon and goals will help optimize your retirement portfolio.

Start by assessing your “sleep-well-at-night meter.” Your risk tolerance may or may not match the risk you need to maintain purchasing power and growth. Maximizing for factors such as growth can help you meet your longevity and medical expense needs.

Second, select fundamental investments that meet your foundational lifestyle needs, commonly called your core portfolio. For example, three to four low-cost, diversified index or exchange-traded funds (ETFs) may suit your core portfolio across equities, bonds and domestic and international investments.

Your market equity participation will depend on how much guaranteed income coverage you have from resources such as Social Security and your risk tolerance.

If you have the capacity and…