6 Ways to Bulletproof Your Retirement Plan

Here is how to reduce the risk in your retirement portfolio.

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Most of us already know that we should become more conservative with our investments as we age, and gradually allocate more of our portfolio to bonds and other safer investments. Here are six other ways you can reduce your risk as you age and as your retirement assets grow larger.

[See 10 Tips for Retirement Overseas.]

Give yourself additional foreign exposure. In a world where we are more connected than ever, exposing yourself to foreign investments including currency, bonds, foreign stocks, and ETFs will reduce your dependency on the U.S. economy. If you are a little shy about buying into a company you've never heard of in Ireland, for example, at least invest more in large U.S. corporations that make the bulk of their money in other countries, such as Procter and Gamble or Intel.

Sell all of your company stock. Many former employees of WorldCom, Enron, and Lehman Brothers lost their entire retirement portfolio along with their job. Make sure you diversify your investments beyond the stock of the company you work for.

[See 5 Reasons to Work in Retirement.]

Learn a new skill. Though you are making more money than when you first started your career, you have likely increased your spending habits too. Supporting a family or living large both mean that your job is more important to you than ever before. Learn a new skill so you can improve on the job and prevent yourself from falling behind.

Start earning multiple streams of income. Decrease the potential impact of losing your day job by adding more revenue streams. If it’s passive income, that’s even better, but any type of additional income will do. Though nothing comes without a commitment to work harder, part-time jobs, rental income, investment dividends, and side businesses will all help you weather any storm.

Invest in companies based on consumption. Consider investing in companies that benefit when they charge you more money, thereby offsetting the affects of price increases you experience. For example, gas price increases could be more palatable if you own Exxon Mobil stock.

[See 7 Ways to Check Up on Your 401(k).]

Own less real estate. Having all of your eggs in one basket is never the ideal way to invest. But most of us have the majority of our assets tied to one of the most illiquid investments there is: our home. I'm not telling everyone to avoid owning a home, because buying a house gives you a solid way to build wealth over time. However, buying vacation homes, real estate investment trusts, and rental properties should only be considered if you already have other substantial investments.

Reaching a comfortable retirement is easier if you can eliminate potential catastrophic events that could derail your plan. These moves may not make you a billionaire, but they will boost your chances of saving millions.

David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.