Funding your retirement
One of the main questions many investors have about their wealth management is, when is the right time to sell my stocks? If you’re on the verge of retirement, or in retirement, that question becomes even more critical. Retirement is when people are living on a set and limited income—after all, you’ve left the workforce, so there aren’t as many options to increase your cash flow.
So, do you sell your stocks to fund part of your retirement, or do you hang onto them until you need the money? Do you cut out when the market hits bottom, or do you wait and sell after the market has bounced back? Here are some answers to many of your burning wealth management, retirement-stock questions:
Should you own stocks in retirement?
This is a tricky question, and one without a definite yes or no answer. In general, you should own stocks in retirement only if:
- You have a backup plan if your investment tanks
- You can afford the risk
- Your stocks are all part of your masterfully-planned retirement
Other than those reasons, stocks don’t necessarily have a place in your golden years, and they can go toward funding it instead. Which leads to the question:
When is the right time to sell stocks?
There are some clear signs it’s time to sell your stocks, and you should look at them in terms of your wealth management plan.
The value is sliding: You’re retiring (or retired). You want to capitalize on your investments. If a stock is taking a dive, get out and take those retirement funds before the value is completely gone. Even if they go back up, it may not hit as high a high. Either way, you have to cut loose at some point; why not when the trend is looking downward?
Underperformance: If the stock you invested in is underperforming, don’t hesitate to let it go. Have a plan in place for what those retirement funds will be used for, and budget accordingly.
Missed earnings: If growth isn’t happening, it may be time to get rid of stocks and add them to your retirement instead.
An overall stock market decline: There is no guarantee of a rebound within your golden years. If you are about to retire and you see a stock market decline, you might want to get out. Have the money where you want it - available to fund your retirement. Note: Many experts don't encourage selling when the market has bottomed out. Talk to an experienced advisor if you are facing this situation.
Do You Need Help Funding Your Retirement?
Social security can take only take you so far. If you’ve been smart and really planned out your wealth management strategy, chances are you have money stowed away in a variety of accounts. This is where it helps to have competent professionals who understand the nuances of retirement to help you decide when and where to sell stocks, pull from retirement accounts, and more. It’s about assessing how much income you have each year, and how much of gap you have between that income and what you want or need financially. From there, you’ll likely need to sell some investments each year to fund your retirement. Do your research, talk to the experts, and make a plan on how you will have what you need when you need it throughout your retirement.
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