The following is my answer to a Quora
question: “When
I turn 65 years of age, is there anything special I should be doing with my
mutual funds?”
At this age, I am assuming that you are
looking to draw down your investments, and enjoy your retirement. Firstly, your focus is now wealth protection,
no longer wealth accumulation. This
means shifting your weightage towards bonds and less volatile instruments. You cannot do away entirely with stocks since
you do not know when exactly you will die, so you still need to at least make
enough to beat the rate of inflation.
Secondly, you need to concentrate on
instruments that are more liquid. This
means more funds into money market, and less in 30-year T-bonds, for example. Also, set aside funds for anticipated
increase in medical expenses. Ideally,
this should have been done much earlier.
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