Many people build their investment portfolios as a means of preparing for retirement. It’s a sensible plan – so much so that many retirement accounts are actually tied to the stock market. Does it still make sense to be actively investing after you retire, though? There’s no one answer, but, when done right, investing in the stock market can provide some financial stability and even abundance beyond the end of your employment.

Thinking Long-Term

One reason that people rely so heavily on stock investments prior to retirement is that playing the long-game can be especially profitable. Interest compounds, you have more data about risk, and over time the market tends to correct itself if you do suffer losses. Part of investing during your retirement, then, is standing by your long-term investments, and not cashing them out too soon. If you don’t need the money right away, stay the course, because your investment will likely be worth more by the time you draw on it.

Evaluate Your Budget – And Your Limits

Investments can provide a great boost to your financial well-being in retirement, but depending on the circumstances that lead you to stop working, you may need to be careful about them. Specifically, if you’re forced into retirement early and rely on any type of government disability, you will not be able to have any investments or savings over $2,000. One way to sidestep this is by getting a disability insurance quote now and choosing a policy. The payments will undoubtedly be higher and you will also be allowed to retain your investments and other assets.

Beware Volatility

As noted, long-term stock investments tend to be relatively secure since the longer time-period tends to minimize volatility. What this long-term strategy overlooks, however, is the fact that more volatile stocks are often more profitable. With this in mind, if you’re considering owning stocks in retirement, you should ensure you aren’t choosing stocks with a history of huge fluctuations. Once you’re in retirement, you just don’t have time to wait for those corrections, and any loss could seriously compromise your future financial stability.

Consider Stock Alternatives

Stocks are often the first thing that comes to mind when people think about investments, but that doesn’t mean that this is the only venue available to you for investments. In fact, stocks are hardly ideal if you’re worried about financial losses; as the professionals say, you shouldn’t invest what you can’t afford to lose.

The good news is that if you want to invest but are wary of stocks, there are lots of other investment options, that can help you set aside money, and even increase your financial holdings. You might choose to invest in corporate or municipal bonds, certificates of deposit, or treasury bonds, for example. Or, if you’re willing to test the waters of the stock market but want to minimize risk, you might consider something like an ETF (exchange traded fund), which is designed to balance out risk.

If you’re lucky enough to be in a financial position to invest during your retirement, you’re already more financially secure than many, but that doesn’t mean you should take excessive risks. It’s important to proceed with caution, which means investing your funds with an eye on needing them in the near future, as opposed to having time to recoup them – after all, you never know what tomorrow will bring.