Retirement looming, portfolio in the toilet

Getting ready to retire can be a very scary thing to many people. It is even more difficult when the economy is suffering and no one knows when we are going to hit the bottom. But all is not lost and there are still things you can do to improve your financial situation even if you are nearing retirement and your portfolio is suffering. Careful and exact planning is necessary and you have to make smart decisions and then follow through with them.

One of the first reflexes people have when they have money in the stock market and the market takes a big dip is how they can protect their money. The truth is that people really spend too much time worrying about what the stock market is doing. There have always been ups and down and there will continue to be ups and downs as retirement gets even closer and comes to life. But just because the DOW Jones drops a few hundred points doesn't mean that you should start keeping cash under your mattress. Don't pay too much attention to your investments. If you find that you are losing too much money in the market, then reallocate your money instead of taking it out of the market. The tax implications of liquidating a retirement account are very unattractive when you realize how much it will really cost you to close your accounts. If you can roll over your money into a lower risk account or just reallocate your stocks to investments that are less volatile, then do it. You don't have to take your money out of the market, and could actually be worse than just letting things sit. The rule is that those who have their money invested in the stock market for long enough will always see a return on their money over time. If you are too impatient, then this kind of account may not be right for you.

Diversification is also important when you are approaching retirement. You never want to have all of your money in the same place or working at the same risk level. You should have bank accounts, CDs, stocks, bonds and other types of investment to level out the risk of your whole portfolio.

Some people don't know if they will be able to recover from some hard economic times when they are having trouble with their retirement portfolio and retirement is just on the horizon. If you are working right now and want to have more money later on, you can get another job. If you still have several years before retirement, you can even look for a new job or try to get a promotion where you currently work. Many people even choose to work after retirement because they like it and because it brings them a certain level of satisfaction. Many people have hobbies they always thought would be a good business, but never had or too the time to develop them while they were working. If you have an idea or want to start a business, then get started as soon as you can. Many retirees don't want to quit working entirely, but only want to get out of the rat race working for someone else. If you have a good idea and the tenacity to start a business, then becoming your own boss could be a good way to secure your finances and prepare for a better retirement.

Just because things don't look so rosy right now for your retirement portfolio doesn't mean that you can't turn things around. Sometimes patience is the key and just waiting for the market to readjust will give enough boost to your portfolio for you to retire comfortable. Most of all, you need to be realistic with your expectations and what you are really hoping to get out of retirement.