imle tes for a Retirement Portfolio

Simple Steps for a Retirement Portfolio 1

Simple Steps for a Retirement Portfolio

All investing involves risks including loss of principal.

All investing plans and rules are provided for informational purposes only, and should not be considered

a recommendation of any security, strategy, or specific portfolio allocation. Investing plans and rules are

provided for clients to better understand how they may build their own plan that may best fit their own

personal investing style.

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may involve international risk, currency risk, commodity risk, leverage risk, credit risk, and interest rate risk.

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typically apply.

Mutual funds are subject to market, exchange rate, political, credit, interest rate, and prepayment risks,

which vary depending on the type of mutual fund. Fund purchases may be subject to investment

minimums, eligibility, and other restrictions, as well as charges and expenses. Certain money market

funds may impose liquidity fees and redemption gates in certain circumstances.

Examples are provided for informational purposes only, and they may not take into consideration all

transaction fees or taxes you would incur in an actual transaction. Past performance does not guarantee

future results.

Asset allocation and diversification do not eliminate the risk of experiencing investment losses.

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Important Information




Remember the five simple rules for investing.

As you build your index fund portfolio, you can reference this summary of the steps outlined in the course.

Minimize fees and taxes.

Contribute early and often.

Diversify your portfolio.

Focus on your long-term goals.

Invest according to your time horizion.

Step 1: Set Your Goal

Use SMART criteria to define your financial goal.

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Choose account(s) appropriate for your goal.

If you’re investing for retirement, consider contributing to tax-advantaged retirement accounts.

You might keep your investments in multiple accounts, depending on your goals.

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Traditional and Roth IRAs/401(k)s

Though both traditional and Roth retirement accounts offer potential tax benefits, each can offer tax benefits at a different stage in your life.

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Traditional Account


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Roth Account

Traditional and Roth IRAs/401(k)s (Cont.)


For goals other than retirement, consider different types of accounts.

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An investor should consider a 529 Plan’s investment objectives, risks, charges and expenses before investing. The plan’s Program Disclosure which contains more information, should be read carefully before investing.Investors should also consider before investing whether their or their beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program and should consult their tax advisor, attorney and/or other advisor regarding their specific legal, investment or tax situation. TD Ameritrade does not provide tax advice. Every individual’s tax situation is different, and it is important to consult a qualified tax advisor regarding the application of a Plan’s benefits to your own individual situation.


Choose your asset allocation.

25+ years until retirement: Aggressive Portfolio

15 – 25 years until retirement: Growth Portfolio

Step 2: Allocate Your Portfolio

For illustrative purposes only. Not a recommendation.

Consider how much time you have until you’ll need to withdraw money for your investing goal— for example, think about how many years it’ll likely be until you retire. Here are some sample allocations for various time horizons.

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5 – 15 years until retirement: Moderate Growth Portfolio

0 – 5 years until retirement: Moderate Portfolio

When you retire: Conservative Portfolio

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For illustrative purposes only. Not a recommendation.


Find funds.

For ETFs, consider investing in funds within the bottom 20% of expense ratios or lower than 0.25%.

For equity mutual funds, consider investing in funds with an expense ratio lower than 0.7%.

For bond mutual funds, consider investing in funds with an expense ratio lower than 0.6%.

Step 3: Choose Your Investments

Consider using the ETF screener or the mutual fund screener to find funds that represent the asset classes you want in your portfolio. For example, you could screen for low-expense ratio index funds. By filtering out any results that have high expense ratios, you may avoid higher fees that could eat up potential returns.

Buy funds.

To determine how much money to spend on each fund, you can use the following formula:

Mutual funds allow you to invest a lump sum. If you’re investing in ETFs, use the following formula to calculate the number of shares to purchase:

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https://invest.ameritrade.com/grid/p/site#r=jPage/https://research.ameritrade.com/grid/wwws/screener/etfs/overview.asp?c_name=invest_VENDOR

https://invest.ameritrade.com/grid/p/site#r=jPage/https://research.ameritrade.com/grid/wwws/screener/mutualfunds/screener.asp?method=new&c_name=invest_VENDOR


Commit to making contributions.

Rebalance your portfolio.

Check your progress.

Step 4: Manage Your Portfolio

It’s a good practice to set up automatic electronic contributions to your accounts. Starting contributions early and contributing regularly can have a profound impact on your investments.

Consider checking up on your portfolio annually. If your portfolio has drifted between 5% to 10% from your target allocation, consider buying and selling shares to return to your target allocation. Remember, as time passes and you grow closer to your investing goal, you may want to change your target allocation.

From time to time, you may want to take a look at your rate of return over the past several years and see how likely it is that you’ll be able to meet your SMART goal in your planned time frame.

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https://invest.ameritrade.com/grid/p/site#r=deposits


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imle tes for a Retirement Portfolio