If you’re a baby boomer, you could be at risk of heading into retirement without enough to live on. Exchange traded funds (ETFs) can help you get back in the game.

The first wave of baby boomers – those born between 1946 and 1955 – are cashing their last paycheck. The amount of assets they have on reserve for retirement is about 12% lower than four years ago.

According to Cogent Research, the first wave boomers have about $708,000 for retirement in average, compared to $809,000 in October 2006. [ETFs VS. CEFs: What’s Best In Retirement?]

Second-wave boomers, those 45-56, are looking much better off, but that’s simply because they’ve got more time to rebuild their portfolios. [Why ETFs Are Retirement’s Next Big Thing.]

Here are some tips to get you back on the road to a comfortable financial future:

  • Separate retirement money into different categories.  Three categories to consider are short-term funds, which reside in very low-risk investments, such as high-quality bonds; intermediate-term money goes in a balanced mix of stocks and bonds, such as a 50-50 or 60-40 split; and long-term investments starting with five-year time horizons are heavier on stocks.
  • Don’t look too far for yield, because decent yields can be tough to locate. Treasuries are the safest, but they yield little. If you want a bigger yield, you’ll have to take on some risk
  • Go for dividends.  The main reason behind this is because dividend income, which is generated from company profits paid out to shareholders, helps offset fluctuations in a stock’s share price, creating a cushion during turbulent markets.
  • Consider alternative asset classes. This includes classes such commodities, annuities and real estate, just to name a few.
  • Have a discipline. Young or old, you need a buy and sell strategy to keep your investing methodical and non-emotional. Keep it simple – strategies like trend following are so popular because they’re so easy to use.

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.

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