Investing For Retirement - Tips and Strategies You Need To Know

Investing for retirement today demands that you account for the fact you are expected to live 20 years or more, enjoying the better part of your life.

This means that you will be always battling inflation in trying to stretch your dollar and maintain your purchasing power. As such, you must take an equally aggressive stance in your investment strategy as opposed to the conventional conservative position.

Whereas you shouldn't be foolish with your money, your battle against inflation can only be won by taking more calculated market risks. This would include but not limited to greater exposure to the stock market and one of the greatest inflation hedges of all time, real estate (especially when purchased in your Self-Directed IRA )

One way to minimize your risk against loss, however, is to have your financial advisor separate your investments into 3-4 groups. Each group will represent the time periods of your retirement in 5-year increments.

The first 10 years of your portfolio will be represented by assets that are conservative, safe, liquid (this can include annuities or permanent life insurance contracts) and, that have a guaranteed rate of return receiving tax-favorable treatment.

The second half of your portfolio will be allocated to more aggressive investments in stocks, bonds - whether purchased in separate investments accounts or inside of your IRA - and real estate. Since this half will be invested for a little more than 10 years, that should be sufficient time to recuperate any temporary loss in asset values.

Naturally, as the asset of the first half is depleted, you will simply re-allocate the more aggressive portion of your portfolios to the more conservative, safe, liquid and guaranteed investment vehicles mentioned above.

The bottom line is this: in light of the number of years you're expected to live in your retirement, and the eroding factor of inflation on your capital, investing for retirement today may require a more aggressive strategy than retirees did in the past.

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