Growth-oriented investments can be suitable during your working years, when your goal is to accumulate and grow your savings as much as possible. Since retirement is still decades away, you have the time to ride out a potential market downturn.
But as you near retirement and get ready to transition into the distribution stage of your life, you lose the luxury of time. If you haven’t made the switch to investing for income ahead of retirement and experience a major market correction, you could be forced to liquidate a greater number of shares of your investments to generate the income you’ll need. Do this too many times and you could run the risk of cannibalizing your savings.
That’s why, as you near retirement, it makes sense to work with a financial advisor who understands the best ways to help preserve your principal, so you can use your savings as a renewable source of steady income you can count on.