Planning For Retirement at Any Age

Now is the time to dial back your exposure to stocks dramatically and jump into income producing assets like bonds, real estate investment trusts and annuities. Simply put: you are too old to weather another bear market in stocks like the one we just experienced. Keep some stocks — no more than 40% — for growth and as a hedge against inflation. But focus on a diversified mix of income producing assets, including both domestic and foreign bonds, corporate bonds, munis and Treasuries (including a slug of Treasury Inflation-Protected Securities, known as TIPS). You may want to own stocks within a target-dated retirement fund that will move to all cash by the time you are 75. At that age, you'll want to consider an immediate annuity to lock in lifetime income. Shop carefully. Annuities come in many forms, and generally the more complicated they are the more fees they charge. A straight immediate annuity, where you hand over cash and get a guaranteed income stream for life, is the easiest to understand. But it pays to complicate them just a bit by adding inflation protection and some period of "term certainty," so that if you pass away prematurely you'll have left something for heirs.