Johnny Poulsen is a financial planning expert with over 25 years of experience in various professional roles. He worked as a sales strategist and financial advisor before becoming CEO and co-founder of Income Lab, a retirement planning fintech firm based in Denver, CO. Johnny Poulsen shares his knowledge by regularly speaking to outside groups on retirement income planning.
Many people don’t have retirement in mind when they assume their first job, but it’s the best time to start making plans for it. Retirement planning begins with determining how much money a person requires to maintain the desired lifestyle after leaving the workforce, and then making plans towards its attainment. Accordingly, one needs to formulate an investment plan. Such a strategy involves choosing credible options to invest in over a period, with reasonable rates of returns.
There is no overemphasizing the importance of diversifying an investment portfolio among aggressive and conservative investment vehicles. It is advisable to invest in more volatile investments that have higher returns in the early stages of one’s professional life, unlike the mid or later stages when the focus should be on capital preservation.
With aggressive investments, funds should be able to snowball, though due diligence must be done to mitigate possible risk factors. Conservative investments should provide stability to the portfolio. Whether choosing aggressive or conservative investment options, it is crucial to ensure that the rate of return of the total portfolio is higher than the annual inflation rate.
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