The majority of people who are reaching retirement age today do not have enough money to retire and live the way that they choose to live. Instead, many of them are getting jobs in second careers and working their way through retirement. If you’re still young or you have not yet reached retirement age, there is still time to build a retirement portfolio that can allow you to live the way you want to live.

Automatic Investment

When it comes to creating a retirement portfolio, you need to make a habit of investing in your retirement account regularly. Regardless of whether you have a 401(k), an IRA, or some other type of retirement account, you need to set up an automatic investing plan that takes money out of your checking account and put it into your retirement account. By doing this, you’ll be surprised how quickly it adds up and gives you money to invest in various securities.

Asset Allocation

Once you have some money in your retirement account to invest, you need to put it into various securities to make sure that your portfolio is diversified. You can’t simply put all of your money into one type of investment and hope to retire a millionaire. Taking a diversified approach is generally much safer and wiser. For example, you may want to put a certain percentage of your money into stocks, another percentage into bonds and some into safer investments like CDs or a high interest savings account. By doing this, you able to get through most of the problems that come along in the financial markets.

Percentages to Invest

Coming up with the right asset allocation in your portfolio can be difficult. Most experts would recommend putting the majority of your money into equities and equity funds until you get older. For example, you could use the old rule of thumb that says take your age and subtract it from 100. The amount that you come up with is the percentage that you should put into stocks and put the rest into bonds. This way, as you get older, you’ll be moving more of your money from equities over into bonds so that your portfolio can generate steady income without all of the risk that comes with the stock market. While you are younger, you can afford a little bit more risk because you have time to make up for mistakes.

Determining the right investments and savings you need to make for retirement isn’t always an easy task; however, taking the time to plan for retirement is definitely worth the energy.  Don’t sell yourself short by making the wrong investments or waiting to plan later in life.  Remain proactive today so that you can enjoy the life you deserve in your Golden years.