As an investor, the biggest change you'll ever face is when you decide to retire. At that moment, your entire investing focus shifts -- and it's essential that your mindset shift with it by adopting a strategy that's tailored more toward the needs of retirees than younger investors who still have long careers ahead of them.

Making the change
To fully understand the magnitude of what happens after you retire, think back to when you were just starting out in your career. At that point, you probably weren't even thinking about retirement -- and even if you did, you had decades ahead of you to figure out the ideal mix of investments to help you reach your financial goals. Choosing the best investments may not always have been easy, but at its core, your investing strategy had two simple principles: Do whatever it takes to come up with cash to invest for your future, and then pick investments to maximize your portfolio's growth. And in the worst case scenario, if you picked a losing stock, it wasn't the end of the world; you still had a long time to make up for your mistakes.

By the time you retire, everything has changed. Having given up working, your income comes solely from the fruits of your past labor: Social Security payments or pension checks from your past employers, and the income that your investment portfolio generates. And most importantly, the consequences of failure in your investments are much higher; having already received all the money you're going to earn, you won't get a second chance if you lose your nest egg in retirement.

Playing it safe(r)
With your life savings on the line, you need a less aggressive strategy than the one you used early in your career. As a recent article in The Wall Street Journal described, one way to adapt to the new situation is to shift your thinking away from growth toward what some experts call liability-driven investing -- matching your assets to your expected living expenses both now and in the future.

The challenge, of course, is getting a perfect match. With bank CDs or individual bonds, you can know with precision how much money you'll receive at a certain future date. But with rates so low right now, most people don't have enough money invested to rely solely on those investments. Even introducing the relatively conservative bond ETFs iShares Barclays TIPS Bond (NYSE: TIP) and Vanguard Total Bond Market (NYSE: BND) makes your portfolio's future value uncertain, because changing rates and defaults within bond portfolios can cause losses of principal.

Making a reasonable compromise
Unless you have enough money that you can stick it in a bank and live comfortably on a CD paying next to nothing in interest, you're probably going to have to accept some risk in your retirement portfolio even after you retire. That's why many experts recommend keeping a good-sized allocation to stocks even in a retiree's nest egg; stocks provide growth, and a dividend-oriented stock ETF such as Vanguard Dividend Appreciation (NYSE: VIG) or SPDR S&P Dividend (NYSE: SDY) can also provide healthy income.

For instance, at the Fool's own Rule Your Retirement service, Foolish financial planner and retirement expert Robert Brokamp suggests a model portfolio for retirees that consists of roughly 55% bonds and 45% stocks. Despite having plenty of conservative investments, the model portfolio includes higher-volatility ETFs like Vanguard MSCI Emerging Markets (NYSE: VWO), Schwab International Equity (NYSE: SCHF), and iShares S&P 600 Small Cap (NYSE: IJR).

Other investment managers have different ideas. Vanguard's target retirement fund for current retirees has roughly 30% in stocks, 60% in bonds, and 10% in cash. Fidelity's comparable fund has only 20% in stocks and more than 25% in cash, with the rest in bonds.

Find the right fit
Regardless of the exact mix, these financial professionals share a common view: that asset allocation plays a vital role even after you retire. Although you can't afford to take the same level of risk you did early in your career, retirement doesn't mean retreating entirely to ultra-safe investments.

By keeping stock exposure in your investment mix, you'll still be able to tie parts of your portfolio to your money needs in retirement. Better still, you'll be more prepared to handle whatever the financial markets throw at you during the rest of your life.

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