Here's how to get on the right track with your retirement portfolio:

• Make sure your risk level is appropriate.

• Check your diversification.

• Create and maintain an emergency fund.

• Check your beneficiary designation.

• Pause your required minimum distributions.

• Develop a budget and an income plan.

1. Make Sure Your Risk Level Is Appropriate

   If you can't sleep at night when your portfolio loses value, you are probably taking on too much risk with your retirement investments.

   You may not fully understand your risk tolerance until you have experienced significant investment losses. If you are worried about your portfolio go through the first half of 2020, please check with your financial advisors to re-assess your situation.

2. Check Your Diversification

   Holding different types of investments and setting up multiple income streams for retirement can help protect you from significant losses. "Think about your overall portfolio and sources of income. Pensions and Social Security are both fixed sources of income. Those are your conservative investments. You have a base," says Pat Murphy, CEO of John Hancock Retirement Plan Services in Boston. "But because you expect a long life in retirement you need intermediate and long-term investments to continue to grow."

3. Create and Maintain an Emergency Fund

   While a retirement account can be used for unexpected expenses, you need to watch out for taxes and the early withdrawal penalty, even if this year the penalty rule is relaxed under the CARES act designed for the pandemic. A designated emergency fund allows you to avoid tapping your investments for a financial emergency.

4. Check Your Beneficiary Designation

   Check your beneficiary designations including the primary beneficiary and contingent beneficiaries. Please see this article where we list out the benefits of having and updating this designation.

5. Pause Your Required Minimum Distributions

   Retirees will be allowed to skip their 2020 required minimum distributions from 401(k)s and IRAs due to provisions of the CARES Act. If you don’t need the money, pause it. If you decide later that you want or need the money, you can resume distributions. Postponing your required minimum distribution gives your investments time to recover before you resume withdrawals and allows you to delay paying income tax on the distribution.

6. Develop a Budget and an Income Plan

   Working people usually receive most of their income from a single job. A rule of thumbs is 3-months’ living expenses if two spouses are working in different companies. 6-months’ worth is advised if there is only one income or both spouses work for the same employer.

   Budgeting becomes more difficult when you retire and have to depend on retirement accounts that are subject to the whims of the market.

   Retirees often have several sources of income. Social Security is often the base of your retirement income, but also remember to include retirement account withdrawals, investment returns, pensions, annuities and potential income from a part-time job in your retirement budget. Check that your income will be enough to cover your essential retirement expenses.

Please call us on 866-860-3880 to discuss if any of these recommendation relates to you.

For the original post, please visit Your Midyear Retirement Finances Review