Home>Video>How Our Model Portfolios Can Help You Save

How Our Model Portfolios Can Help You Save

Fri, 27 Jan 2017

Christine Benz's retirement saver portfolios can serve as a guide for accumulators.

+

Video Transcript

As part of Morningstar's Guide to Saving for Retirement, our director of personal finance, Christine Benz, is walking through the key decision points to ensure your portfolio is poised to help you amass the wealth you will need for retirement. 

Christine Benz: Hi, I'm Christine Benz for Morningstar.com.

It can be tricky to put together a retirement portfolio that has growth potential but isn't overly risky. If you have a long time horizon to retirement--at least 10 years--it makes sense to hold the most you can in higher-returning assets--mainly stocks. On the other hand, if you're closing in on retirement, or you've been really disconcerted and made poor decisions during previous market downturns, it's better to park at least some of your money in lower-risk assets like high-quality bonds and cash.

In assembling my model portfolios for Morningstar.com, I've used the allocations of Morningstar's Lifetime Allocation indexes to guide the portfolios' ratios of stocks, bonds, and cash. With just a few exceptions, I've used mutual funds and ETFs that earn Medalist ratings from our analysts. That means that we expect them to outperform their peers on a going-forward basis.

One question I often get is how best to invest in a tax-sheltered account, like an IRA or 401(k), and how to invest in a taxable account. The short answer is to not get too hung up on tax matters. You may have heard that you should hold high-income assets like bonds in your tax-sheltered accounts, because their income is taxed at your ordinary income tax rate. But if you're a young accumulator, you shouldn't hold much of your retirement portfolio in bonds, at all.

Investors who have been following my model portfolios for a while have probably noticed that I don't make frequent changes to them. That's by design. I love the saying that your investment portfolio is like a bar of soap: the more you handle it, the smaller it gets! Check up on your retirement portfolio just once or twice a year--and quarterly at most.

Thanks for watching. I'm Christine Benz forMorningstar.com.

  1. Related Videos
  2. Related Articles
  1. Don't Overcomplicate Your Portfolio

    Consider target-date funds, mutual funds , or ETFs to help keep things simple, says Christine Benz .

  2. Finding the Right Asset Allocation for Your Portfolio

    Consider time frame, asset class returns, and risk when deciding what to invest in, says Morningstar's Christine Benz .

  3. A Wellness Check for Your Retirement Plan

    Christine Benz shares the keys to determining if your retirement plan is on track.

  4. High Income? Don't Overlook These Savings Vehicles

    Morningstar's Christine Benz suggests wealthy investors consider backdoor IRAs, health-savings accounts, and 529 plans to maximize tax savings.

  5. How to Prioritize Retirement Savings

    Take a step back and look at your household balance sheet to make sure your savings dollars are generating the highest return, says Morningstar's Christine Benz .

  6. Time to Recalibrate Your Foreign Stock Holdings?

    With more enthusiasm from experts on foreign-equity returns, Christine Benz says investors may want to check in on--and potentially bump up--their exposure.

  7. Benz: What To Do With Unneeded RMDs

    Morningstar's Christine Benz shares a few tax-efficient options for retirees who don't need their required minimum distributions.

  8. Asset Allocation Tips for a Lofty Market

    The current environment where both stocks and bonds look fully priced creates challenges for investors of all life stages, says Morningstar's Christine Benz .

©2017 Morningstar Advisor. All right reserved.