Money Sense: 5 Rules for investing in retirement – Cross Timbers Gazette |

Managing your portfolio with new risks and priorities in mind takes careful planning and regular monitoring. Here are tips from Merrill on how to get started.

Heads up: Investing in retirement is not the same as investing for retirement. All the smart strategies you used to accumulate enough for retirement will likely need adjusting as you enter the next chapter of your life.

Think of it as a shift in perspective from investing for the really long term to being much more prepared for shorter-term risks. “If anything, investing in retirement is a bit more complex, given the variety of potential risks and uncertainties,” says Anil Suri, a managing director in the Chief Investment Office (CIO) for Merrill and Bank of America Private Bank.

So where do you begin? It can start with a thorough portfolio review with your advisor, ideally at least three years before you retire. After you retire, plan to revisit your portfolio quarterly and keep these five investing guidelines in mind. 

1. Review your asset allocation with new risks in mind.

In mid-career, you could afford to be aggressive with your portfolio. When you are drawing down those assets after you retire and have less time to recover from market drops, a more conservative approach may make sense. Still, being too conservative heightens the risks of outliving your money and failing to keep pace with cost-of-living increases. Consider that even a modest annual inflation rate of 2.5% would erode the spending power of a dollar by 46% over a 25-year period, according to calculations by the CIO.

Ask your advisor whether your current fixed income and dividend stock investments are sufficient to supply you with the income you will need, given the potential for inflation and market volatility. Will your current asset allocation provide enough potential growth to cover another 20 years or more? Finding the right balance for your personal situation is key. 

2. Prioritize your immediate cash needs.

If your noninvestment income (Social Security, a pension, income from a part-time job) covers all or most of your essential expenses — healthcare, housing and so on — you can take on more investing risk. If not, you may want to have more of your investments in lower-risk assets, such as U.S. Treasuries, high-grade corporate bonds or annuities.

“You want a high level of certainty around the investments that are supporting your essential lifestyle,” Suri says. “Beyond that, you need to pursue more growth.” Keep in mind that you may end up spending more than you anticipated in retirement. Some 45% of retirees report spending more than they had expected, according to the 2025 Retirement Confidence Survey from the Employee Benefits Research Institute and Greenwald Research.

3. Do not abandon stocks.

While stocks are susceptible to short-term price swings, they also give you the best chance of staying ahead of inflation and helping your money last. While you may have previously felt…