How well-prepared is your nest egg?

You might have heard it before. As you get closer to retirement, financial experts advise shifting your retirement portfolio to more conservative investments, for example, from stock to bonds. If you’re retiring in five years or less, the coronavirus pandemic and the emerging crisis is exactly why this piece of advice should be put into practice.

If you’re in for the long haul, stock markets can be quite stable and predictable. If you can afford to wait out the occasional market downturns and not flee the stock market, things can look pretty good for you. However, if you lose your job or go through other financial difficulties, you’ll need money; and if that money is invested in stocks, you might end up selling your stocks below the price market to cover your daily expenses.

Why it’s important

If you went for the safer ground and already shifted your assets from stocks to bonds, you’re probably in a good situation right now. You can afford to wait for the market to recover before selling any of your assets. If you haven’t had the chance to prepare your portfolio, you’ll probably have to rely on your income for a little while longer. If you do decide to retire earlier, you might find yourself in a more difficult situation, financially speaking and have no other solution than to sell your stocks.