For those hoping to call it quits soon (that is, within the next five years or so), NOW is the time for an executive health check-up of your finances. You’ve (hopefully) squirrelled away whatever you could over the decades in your pension/retirement/IRA/402(k) or whatever else it is that you call your primary retirement kitty. And that money has (hopefully again) been working hard for you, boosted by the power of compound interest.

Great. Now, after you’ve retired, you would (obviously) stop working. But the same should not be true for your money. Even as you’ll need a regular income from this fund of funds, this money should not sit idle. It should continue to work hard so that you don’t face any financial difficulty and spend your (hopefully once again) long retirement in comfort.

Here’s a three-step guide to retiring in peace if you’re on the cusp of retirement:

1. Audit your asset allocation

The right asset allocation is critical especially for those nearing retirement. While growth is definitely required, your appetite for risk would be close to rock bottom.

 A. nice mix of bluechip, dividend-paying stocks and bonds will help you avoid serious losses should the market crash. Depending on your financial situation and post-retirement income sources, keep at least 50 per cent of your retirement investment kitty in bonds. You can adjust that percentage based on your risk tolerance.

2. Diversify your portfolio

Jokes apart, even after you’ve safely split the assets into stocks and bonds, the quality (and quantity) of stocks will still matter. Spread out the stocks across several companies across a bouquet of economic sectors. Remember people thought they couldn’t go wrong with real estate and aviation, and then Covid-19 brought sector heavyweights down to their knees. Diversify.

3. Mind the gap

Read the fineprint when making an investment. Any investment. Random fees can eat into your returns, which will be akin to a broker or brokers eating a lice or two from your lunch pizza, quite literally.

Sure, the brochures and all may have you believe that a fund actively managed by a superhero fund manager shows better returns than the underlying indices, but the fund management charges and fees could be a deal-breaker if you’re at the cusp of retirement. Go for index-linked funds if you have faith in the overall growth story. Such funds track existing market indexes, like the S&P 500 or the FTSE 100 or the Nikkei and Nifty 50, and aim to match their performance. They tend to charge significantly lower fees than the actively managed funds and, routinely, outperform their actively managed counterparts.