How Should I Invest for Retirement?

By: Trent Grzegorczyk

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This is a common question investors ask themselves, but the answer almost always varies from one situation to another.

However, there are a few rules of thumb principles you might want to consider:

The younger you are, the more aggressive you should be with your retirement savings, and the closer you get to retirement, the more conservative you should be.

Aggressive meaning taking on more risk, and conservative meaning taking on less risk.

Let’s give an example to determine how you could consider investing for retirement purely based on your age and retirement date.

Say you are 60 years old, and plan on retiring at 66. You should consider your investment portfolio(s) to be allocated between 50%-60% stocks/equities, and 40%-50% bonds/fixed income.

Ultimately, this depends on your risk level, income needs, goals, and objectives, but this is a start.

So, how do you invest your portfolio to 50% stocks, 50% bonds?

At MICAPITAL, we generally use low-cost index funds or ETFs to achieve this type of asset allocation. For example, below is our 50% stocks, 50% bonds model portfolio that is built with low-cost index ETFs. 

Click below to view our balanced portfolio report.


The model portfolio above would be classified as “moderate” risk level. This risk level is generally suitable for all ages, but most commonly used with investors over the age of 50 or those who are closer to retirement. If you are under the age of 50, you would modify the holdings above to be weighted more to stocks, and less to bonds, bringing your risk level up a notch to try and earn a higher return over the long-term. Then, as you get closer to retirement, you can slowly adjust closer to 50/50 or 60/40, stocks to bonds. After determining how you would like your portfolio to be allocated, you might want to consider rebalancing your portfolio at least once or twice per year. At MICAPITAL, we rebalance our client accounts every quarter. What rebalancing will do for you is bring your portfolio back to “par”. Occasionally, your holdings can get overweight or underweight due to market fluctuation. Rebalancing helps to prevent your portfolio from getting out of “whack.” If you are invested in a retirement plan through your employer, they typically have an option within the online portal for you to set up automatic rebalancing. By setting this auto rebalance up, you can easily keep your portfolio on track. If you are invested outside of a company retirement plan, there could be an option for this as well. Summary: Investing is a great way to reach your financial goals including retirement. The younger you are, the more aggressive you should be. The closer you are to retirement, the more conservative you should be. A great way to achieve your optimal asset allocation is by using a blend of low-cost index funds or ETFs. You can keep your portfolio in good order by rebalancing at least once or twice per year. 

About the Author

Trent Grzegorczyk is the founder and principal of MICAPITAL, a registered investment advisor. Trent works with business owners, professionals, and high-net-worth individuals. Over the past 9 plus years, he and his colleagues have advised on over $3 billion in client assets. Trent enjoys cross country cycling, traveling, hiking, and resides in Traverse City, Michigan with his wife Alayna.

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