As individuals approach retirement around age 55, reallocating a 401(k) is essential for balancing growth and reduced risk. Investors should consider gradual shifts to conservative investments like bonds. It’s vital to maintain growth to outpace inflation, projected at 2.5% in 2025. Personalized guidance from a financial advisor can help align one's 401(k) allocation with individual needs and market conditions, addressing concerns of risk tolerance while supporting sustainable retirement income over the long term.
At 55, reallocating a 401(k) requires balancing reduced risk with sufficient growth to support a sustainable 4% withdrawal rate in retirement.
Gradual shifts toward conservative investments, like bonds or target-date funds, align with declining risk tolerance while addressing inflation and longevity.
Personalized financial planning, guided by an advisor, ensures a 401(k) allocation meets individual needs and market conditions in 2025.
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