I Asked a Financial Planner How to Diversify My Retirement Portfolio


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One of my biggest goals in life is to retire early. As a self-employed person, most of my daily decisions and thoughts are about how to bring in more money. In 15 years, when I’m 50, I don’t want that to be the case. I want to be retired and have my lifestyle supported by passive income, investments, and retirement funds.

But at the end of 2023, I took a look at my financial portfolio and realized that my retirement planning needs a lot of support and strategy.

I met with certified financial planner David Weinstock and asked him about the only retirement account that I have, a SEP IRA. While Weinstock said that having a SEP IRA is a good starting point for my retirement portfolio, it shouldn’t be the only thing that I have. Here are the four suggestions he had for ways I can grow my retirement portfolio and diversify my assets.

1. Consider diversifying my portfolio for tax advantages

I only started thinking about saving for retirement five years ago when I turned 30. Before that, I spent most of the money I earned and didn’t save or invest very much of it. But when I started increasing my earnings as a solopreneur by creating different streams of income, I wanted to improve my finances and start planning for retirement.

Now that my overall portfolio is a healthier place and I don’t have any debt, I told Weinstock that I want to put more money into retirement accounts in addition to what I put into my SEP IRA every year.

For the first step in my strategy, he said I should consider different ways to diversify my retirement portfolio for tax advantages in the future. My SEP IRA is a deferred tax account, which means I use pre-tax dollars to fund it and take a deduction on my taxes. When I withdraw money later on, I’ll pay income tax on the withdrawals.

“If you’re deciding between an IRA and a Roth IRA, and you qualify for either, you might want to diversify your tax picture over time by contributing to both,” he said.

Weinstock explained that a Roth IRA lets you pay taxes on the money going into that account. All future withdrawals are tax-free.

“Having both accounts allows you to diversify your tax picture, because with your SEP IRA, you get a tax deduction now, in what you hope are your high earning years, but then when you take the money out, you will hopefully be in a lower tax bracket,” he explained. “Having money in a Roth IRA lets you know that you will have tax-free income later in, in case your tax bracket is higher down the road.”

After speaking with him, I decided it would be beneficial to have a Roth IRA since I do meet the qualifications for opening one in 2024.

2. Make sure my investment and retirement portfolios are diversified

I told Weinstock that I have been hands-off with my investment portfolio and retirement fund. I use robo-advisors and don’t really know what I’m investing in. Weinstock recommended that I make sure to look and see if I have a mix of both growth and value opportunities.

“You should have large companies and small ones in your portfolio as well as investments that diversify between stocks and fixed income,” he said. “You might want to have diversification with bonds, including government, corporate, municipal, and high-yield bonds as well.”

When it comes to investing, I said that I mostly have money in US stocks. He recommended considering expanding to international and emerging markets as well for long-term investments.

Weinstock told me it is important that I really understand my asset allocations. This diversification inside my portfolio will determine what type of returns I have over time.

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3. Don’t feel pressured to include real estate

I’ve been eager to invest in real estate for a long time. I’d like to use a property that I own as a source of passive income for retirement. While Weinstock said that diversifying my portfolio could include real estate, it’s not always necessary to do that.

More volatile investments like real estate “might be good diversifiers,” he said, “because they’re offsetting other classes that don’t behave the same way and bringing down the overall risk profile of a portfolio when stand-alone they might be riskier asset classes.”

If I were to go ahead and buy an investment property next year, it would wipe out a lot of my financial goals, like contributing to retirement accounts. Instead, I plan to invest in real estate on a smaller scale, through REITs and crowdfunding.

4. Do a cash flow analysis

When I explained my early retirement goal, Weinstock recommended that I do a cash flow analysis so I can get an idea of what my finances could look like by the age I want to retire.

“Knowing what your cash flow could look like might help drive decisions,” he said. “Not only when you’ll need to collect Social Security and when you’ll withdraw money from your Roth IRA and SEP IRA, but also around how much risk you can take now and what type of asset allocations make sense for your finances.”

Because my income varies as a solopreneur, a cash flow analysis will help me understand how close I am to my goal of wanting to retire by 50 and what I need to change about my lifestyle, spending habits, and income sources to make that happen. I decided to reach out to my account for help with understanding this in the new year.


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