Reduce Your Stock-Specific Risks

“As you enter your 50s and progress into retirement, you should gradually increase your exposure to bonds and decrease stock exposure,” recommended Brett Tharp, CFP, financial planning education consultant at eMoney. “Target-date funds are a convenient way to accomplish this.”

If you don’t know how to properly allocate your bond portfolio, Andrew Latham, managing editor for SuperMoney recommends the following strategy:  “One rule of thumb is to keep at least 60% of your assets in high-grade bonds if you’re only a few years away from retirement and increase it to 70% or more when you retire,” said Andrew Latham, managing editor for SuperMoney.