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Investing the right way for retirement

Planning for retirement is a tricky process. While every American thinking about the coming years should be sure to talk to a financial adviser about the future, there are a number of misconceptions that you should clear before any appointment.

Kathryn Tuggle recently wrote about a few of these investment mistakes for FOX Business. One of the problems that retirees come across is thinking that they have a diverse portfolio. Often, people believe that since they own mutual funds from different managers, they will be safe from any kind of recession.

"Many people buy mutual funds from Vanguard, something from Fidelity, but they don’t realize the top 30 holdings for all these companies are almost all identical," Ken Kamen, the president of Mercadien Asset Management, told the website.

A second risk that investors face is trying to square away as much potential return from investments as possible, while forgetting about having a steady and reliable source of income. Financial planner Curt Knotick explained to Tuggle that you need to back away from risky assets, because you won't have as much time to recover if you're nearing retirement. Instead, focus on longevity.

This generally means finding a balance between leaving some money in stocks that need to mature, while having enough on-hand to afford any kind of emergency or living expense in the meantime, according to Knotick. He recommends annuities, bonds and other guaranteed investments as more secure ways of accumulating savings.

When boomers do choose a financial planner, Knotick advises that they find a tax expert, rather than a public certified accountant. He claims that having a professional oversee tax liabilities can help reduce taxations from 15 percent to 7 percent with a few portfolio strategies.

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