Your risk profile
The next step to meeting your retirement savings goal is to consider the level of risk and rate of return that’s right for you. Your overall background including your age, income, family situation, current financial picture, and overall investment disposition will guide the level of risk you are comfortable with. The more you know about the risk involved, the better equipped you will be when making investment decisions.
Consider the following questions
WHAT’S YOUR RISK TOLERANCE? Risk tolerance changes over a person's lifetime based on their age, circumstances and earnings ability. As you move closer to retirement, you may not be able to endure short-term investment volatility, often associated with stocks. Investors should carefully evaluate their risk tolerance as they approach retirement. Your “risk tolerance” will dictate whether you choose to “stay the course” during fluctuations in the stock market with the goal of benefiting from the potential for long-term growth. HOW MANY YEARS DO YOU HAVE TO INVEST? Before investing, determine the amount of time you have until you plan to retire. Will you retire to an area with lower or higher cost of living, or will you stay put? Will you work part-time or, perhaps, open a small business? If your investment time horizon is short, consider limiting your exposure to the volatility of the stock market.
Visit TA-Retirement.com to learn more.
HOW MUCH HAVE YOU SAVED ALREADY? If you’ve already started saving for retirement, you’re a step ahead. It’s important to factor those existing savings into your plan for the future.
ARE YOU CLOSE TO RETIREMENT?
Typically, employees who are close to retirement gradually shift their portfolios to safer, more conservative investments that are better protected during volatile times. For someone who is farther from retirement, the good news during difficult economic times is that typically most of their portfolio
growth will come from future contributions and earnings.
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