Strategic Wealth Designers: Risk in your portfolio

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As we age, the way we look at investing changes over time. One change is the risk we can tolerate inside our portfolios, especially approaching retirement. Fiduciary retirement planner Jon Jarboe of Strategic Wealth Designers joined us on the newscast to discuss how we should address risk in our accounts.

“Throughout your working years, you can stomach a lot more risk,” Jarboe says. “While accumulating your retirement funds, you’re focused on saving and growing your money. This means you can be more aggressive with your investment options since you have the benefit of time on your side. Once you switch to the distribution phase, this mindset changes. You no longer have the luxury of time to make up for any big losses.”

The rule of 100 can be used for a guideline on how much risk you will have in your portfolio. 100 minus your age will equal roughly the percentage of your portfolio is at risk, with the remaining portion in safe investments. It’s important for those approaching or in retirement to remember that a big loss will hurt you more than a big gain will help you.

“Safe investments are those that won’t lose you any money,” Jarboe says. “We can think of CDs, cash, savings accounts, and some types of annuities like fixed or fixed-indexed as safe investments. These are not the fun portion of your portfolio, but they can be a good foundation to withstand any economic downturns.”

Understanding how the accumulation and distribution phases differ will help you determine how risky you should be with your retirement funds. To see additional stories surrounding business and economic news for Denver area, visit https://KDVR.com/Money and if you have a question for Jon send an email to info@swdgroup.com

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