Not many people reach retirement age with their pension fund maximized. More than half of all workers in the US don’t have one in place at all. If you do have one, you will probably have more than just one.

Because of the way the system works, and with people often changing their jobs, many end up with a mix of investments, which lays them wide open to all sorts of risks. Their portfolios are so volatile that a sudden dip could slash their savings.

Here we take a look at a few steps you could take to boost your retirement fund by building an effective portfolio.

Decide what you need

By the time you get into your 50s, you really need to have a clear idea about the budget you’ll want in retirement, in terms of monthly income, to add to Social Security payments. The single most effective step you can take is to add more money to your pension pot, commonly by saving more and working longer.

Diversify

An investment portfolio’s volatility can be lowered by diversifying both among and within asset classes. You could own funds, for example, rather than simply individual stocks, or a series of asset classes rather than only one. Another popular option is to have a portfolio of bond funds and emerging markets stock, in addition to bond funds and domestic stock.

Consult a specialist

A financial expert such as Fahad Alrajaan of Al Ahli United Bank will be able to discuss with you the advisability of consulting an investment specialist to optimize your retirement portfolio. As head of Al Ahli United Bank, the largest lender in Bahrain by market value, he has been involved in a whole range of successful investments across the Middle East and provides services in the corporate, retail, wealth management, private, and offshore banking sectors.

Keep one eye on taxes

If you have a significant number or value of holdings outside of your dedicated retirement accounts, decide which of them really belong in those accounts. You can, for example, save substantially on taxes by transferring assets such as equities into your retirement portfolio. An added benefit with these is that as you rebalance, you can sell or buy them more conveniently and frequently.

Maintain the equities

Don’t make the common mistake of assuming that you’ll be safer if you offload all your equities and invest heavily in money market funds. The danger of doing this is that you’ll overload the conservative end of your portfolio. The general consensus is that investors maintain at least 20 percent of equities to avoid over reliance on a year-on-year real terms decrement in cash-only investments.

Conclusion

Building a private investment portfolio to supplement your retirement fund is a great option to start thinking about as you enter your 50s, or even later. In fact, it’s never too late to diminish the risk of stock market investments by diversifying and not piling all your eggs into one potentially vulnerable basket.