How to Use ETFs in Retirement
July 25th, 2010 at 1:00pm by Tom Lydon
Baby Boomers who are getting ready to retire may face a conundrum if they’re doing it on the heels of one of the worst financial crises since the Great Depression. But exchange traded funds (ETFs) can help you navigate the waters and get you where you need to go.
To retire, you’ve got to have hit certain financial goals to ensure your money will last as long as you do. Many Baby Boomers getting ready to retire may have been victims in the market meltdown of 2008, with their retirement savings dwindled down to unsatisfactory levels.
The Wealth Pilgrim has these tips to figuring out how much money you need to retire:
- Know how much you spend, including the costs of medical bills. Don’t forget to include inflation in the picture.
- Know your retirement income such as social security plus any pension income etc.
A portfolio that is aggressive enough to assume retirement in an allotted time period is also ideal. There are a few ways to use ETF in retirement:
- All ETF portfolios are available, and many of the larger providers are working on this front in the industry. [The All-ETF 401 (k) Plan Is Here.]
- You can have your own account at a broker with low-cost or even free commissions. [Why ETFs Make Sense in Retirement.]
- Target-date funds automatically rebalance assets to suit your age and year or retirement. [SEC Cracks Down on the Funds.]
Go Baking rates has this advice for those thinking about re-entering the work force:
- You have experience they don’t: One significant benefit of being a recent retiree is that you have years of experience that recent college grads don’t. You’ve been in your industry for years and still have wisdom that a company would value.
- Baby Boomers are still in high demand: Because so many Baby Boomers are set to retire in the coming years, companies will have to fill in these gaps in droves. So if you’re thinking about unretiring, it’s a good idea to make your attempt now.
If you are not seeking work but need to have your daily financials met, it is important to work toward an investment in the future and hopefully another retirement that you can stick with.[How ETF 401(k) Plans are Constructed.]
For more stories about retirement, visit our retirement category.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.