During your working years, your primary investment goal is generally growth – you need your money to grow so that you can eventually afford the comfortable retirement lifestyle you’ve envisioned. But when you retire, should you change course and adjust your investment strategy from “offense” to “defense”?

Actually, it’s not quite that simple. To begin with, even while you are working, you don’t want your portfolio to be completely filled with growth-oriented investments, such as stocks. If it were, you would likely be taking on a degree of investment risk that’s too high, because, as you may know, stocks will fluctuate in price – sometimes significantly. And if you only own stocks, you could take a big hit during a market downturn.

That’s why you need to have an array of investments – stocks, bonds, certificates of deposit (CDs) and so on. By spreading your investment dollars this way, you can give yourself more opportunities for success while reducing the impact of volatility on your portfolio. (Keep in mind, though, that diversification, by itself, can’t guarantee profits or protect against all losses.)

Now, let’s fast-forward to your retirement date. Once you retire, you may need to look at your investment portfolio somewhat differently – instead of “building it up,” you may now want to think of “making it last.” So, your first impression might be that instead of maintaining the diversified portfolio you had when you were working, you need to switch to predominantly “safe” investments, such as CDs and Treasury bonds, to reduce the risk of losing principal.

And such a strategy might indeed be effective – if your retirement were only going to last a year or so. But the chances are reasonably good that you could be retired for two, or possibly even three, decades. If that’s the case, then you will have to deal with a threat to your lifestyle that you might not have considered: inflation. We’ve had low inflation for several years, but that could change in the future. Consider this: Even at a relatively low 3 percent inflation rate, prices double roughly every 25 years. And depending on your personal needs and spending patterns, your personal inflation rate might be even higher.

To protect yourself against inflation, you will find that investments such as CDs and Treasury bonds are typically not much help. In fact, in a low-rate environment, your returns on these investments may not even keep up with inflation, much less keep you ahead of it. That’s not to say they have no value – they can provide you with an income stream and help lower your overall investment risk.

But to defend your purchasing power, you will still need some growth potential in your investment portfolio during your retirement years. Your exact percentage of stocks and other growth-oriented investments will depend on a variety of factors – your projected longevity, other sources of income, family situation, risk tolerance and so on. You may want to consult with a financial professional to ensure that your portfolio mix is suitable for your needs.

Many things may change in your life when you retire – but the need for investment diversification is not one of them.

This article was written by Edward Jones on behalf of your Edward Jones financial adviser.

This article originally appeared on Crestview News Bulletin: Diversification is still important for retirees

School and sports are now in full swing, vacations are over, and it seems like we are running full speed into the holiday season.

With so much on our plates it can be easy to forget to take care of the day-to-day stuff like budgeting and paying bills.

Why not try setting up automatic payments through your financial institution to cover expenses like utilities or credit card bills? Online banking is usually an easy way to accomplish this.

Often a bank or credit union will allow you to keep track of expenses, and will store your utility or credit card account information on its website. With just a few clicks of a button, you can designate how much money to distribute to each account and how often you pay.

Don’t have online banking? Most companies now will set up their own automatic bill-pay. Just contact their customer service line, or visit their website, and a representative will take your banking account information and will have your funds automatically debited in the amount of your bill.

Another way to make sure bills are paid on time and to track your expenses is by using a good old-fashioned calendar. Whether this is one you hang on your wall or one you store on your phone or computer, you can keep track of daily expenses, bill due dates, and income all in one location.

Use your calendar to plan ahead and monitor where you are spending your money. If you notice a lot of money being spent on one expense and don’t have enough money to cover your needs, make a change and give yourself a spending limit for items considered “wants.”

Make a commitment to yourself to save money, reduce debt and build wealth over time. Visit our website, www.okaloosasaves.org, or text “OKSaves” to 95577 to take the Okaloosa Saves pledge. (Standard data and message rates may apply.)

For more information, contact me at 689-5850 or jbreslawski@ufl.edu.

Jill Breslawski is an agent at the University of Florida's Institute of Food and Agricultural Sciences Extension office in Crestview.

This article originally appeared on Crestview News Bulletin: Automatic payments can save people time and money

During your working years, your primary investment goal is generally growth — you need your money to grow so that you can eventually afford the comfortable retirement lifestyle you’ve envisioned.

But when you retire, should you change course and adjust your investment strategy from “offense” to “defense”?

Actually, it’s not quite that simple. To begin with, even while you are working, you don’t want your portfolio to be completely filled with growth-oriented investments, such as stocks.

If it were, you would likely be taking on a degree of investment risk that’s too high, because, as you may know, stocks will fluctuate in price — sometimes significantly.

And if you only own stocks, you could take a big hit during a market downturn.

That’s why you need to have an array of investments — stocks, bonds, certificates of deposit and so on. By spreading your investment dollars this way, you can give yourself more opportunities for success while reducing the impact of volatility on your portfolio. (Keep in mind, though, that diversification, by itself, can’t guarantee profits or protect against all losses.)

Now, let’s fast-forward to your retirement date. Once you retire, you may need to look at your investment portfolio somewhat differently — instead of “building it up,” you may now want to think of “making it last.” So, your first impression might be that instead of maintaining the diversified portfolio you had when you were working, you need to switch to predominantly “safe” investments, such as CDs and Treasury bonds, to reduce the risk of losing principal.

And such a strategy might indeed be effective — if your retirement were only going to last a year or so. But the chances are reasonably good that you could be retired for two, or possibly even three, decades.

If that’s the case, you will have to deal with a threat to your lifestyle that you might not have considered: inflation. We’ve had low inflation for several years, but that could change in the future.

Consider this: Even at a relatively low 3 percent inflation rate, prices double roughly every 25 years. And depending on your personal needs and spending patterns, your personal inflation rate might be even higher.

To protect yourself against inflation, you will find that investments such as CDs and Treasury bonds are typically not much help. In fact, in a low-rate environment, your returns on these investments may not even keep up with inflation, much less keep you ahead of it. That’s not to say they have no value — they can provide you with an income stream and help lower your overall investment risk.

But to defend your purchasing power, you will still need some growth potential in your investment portfolio during your retirement years.

Your exact percentage of stocks and other growth-oriented investments will depend on a variety of factors — your projected longevity, other sources of income, family situation, risk tolerance and so on. You may want to consult with a financial professional to ensure that your portfolio mix is suitable for your needs.

Many things may change in your life when you retire — but the need for investment diversification is not one of them.

This article was written by Edward Jones on behalf of your Edward Jones financial adviser.

This article originally appeared on Crestview News Bulletin: Diversification is still important for retirees