Dear MarketWatch,

I have a retirement question, but first some background. I am a female, age 50, employed at the same job for 25 years. I am not financially savvy at all. As I am inching closer to retirement, I am starting to worry that I won’t have enough money to live comfortably once I retire.

As of today, I have $1.2 million in my 401(k), I make the maximum contributions each year. I also have $615,000 in company stock, and $25,000 in an Employee Stock Purchase Plan (ESPP). Plus, I’ll have Social Security.

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So my question is: What can I do to increase my retirement nest egg? Please do not suggest real estate or the stock market. I live in New Jersey where housing prices and property taxes are quite high, and the stock market scares me!

Cautious but Prepared

Related: My husband makes more money than I do. If I claim Social Security at 72, will I get more in spousal benefits? 

Dear Cautious,

For someone who is not financially savvy, you’ve done a fantastic job at building up that nest egg.

I understand your hesitation about the stock market — it can seem like a scary place — but even without seeing what the asset allocation is like for your retirement account, I can only assume you at least partially have the stock market to thank for amassing that $1.2 million. You will also thank your company stock and employee stock-purchase plan (ESPP) one day, because they too have had a hand in the market.

You likely used a combination of the stock market and real estate to attain the $1.2 million in the first place, said Alex LaRosa, a certified financial planner at Blue Bell Wealth Management. “So, if it’s not broken, why fix it?”

I also understand wanting to avoid the real-estate market. Rental properties can be lucrative, but they’re also a lot of maintenance and money, and if you’re already in a high cost-of-living area, you require the funds and the devotion to make that kind of income stream work for you.

There’s good news for you though — you don’t have to be an active investor to continue growing your investments. You will have to be active in your planning, though.

If stocks are not for you but you don’t mind pursuing investments in a different manner, look at fixed income, such as bonds. One option is a diversified bond portfolio, said Samuel Wagner, a certified financial planner and chief financial guide at WealthGuides. “It’s a great way to mitigate risk — less roller-coaster up and downs compared to stocks — and you earn income through the interest that bonds pay. That income can be used to fund your retirement expenses just like a paycheck.”

In that vein, think about a “bond ladder,” said Ashley Foster, a certified financial planner and founder Nxt:Gen Financial Planning. The “ladder” relates to the different maturity dates — if you spread them out, you can stagger your income over a longer period.

You would receive the interest from the bonds and the principal once the bond matures, Foster said.

Bonds aren’t the end-all and be-all, however. They have their own sets of risks, such as fluctuating interest rates.

Cash and Certificates of Deposit

Yes, there are other avenues, like just saving cash or using CDs, but those options are often tied to inflation risk. The rates CDs have today won’t last forever, and you need your money to work for you so that it not only continues to grow, but grows enough to keep pace or surpass the rising costs of living. One day these rates may not be able to do that (and certainly the rates attached to your typical bank account won’t, either).

Still, if you’re truly sold on avoiding the stock market, examine the spending side of your retirement plans. Preserve that nest egg for as long as you can without touching it so that it’s there over the span of your retirement years. You didn’t specify how much money you expect to need in retirement, or if you have a lot of debt, but those are things you’ll need to rein in to keep your finances in tip-top shape. Also, as you might expect, the less money you need to spend each year in retirement, the less money you’ll need to take from your retirement account.

If you do not take distributions from this account, “it would be relatively easy to continue to grow the account without the use of riskier assets,” said Crystal McKeon, a certified financial planner and chief compliance officer TSA Wealth Management. That’s because your account is already working for you.

Come up with an action plan for your company stock and ESPP, and map out what you can expect from Social Security based on various claiming ages — at 62, Full Retirement Age or 70. Having a plan in place for your other income streams might mean giving your 401(k) more time to work on earning more money.

You will eventually have to tap into it, if not for your own expenses because required minimum distributions will kick in, and if you delay taking any money out until then, you can be faced with pretty large withdrawals. Here’s more on RMDs.

Check your 401(k) asset allocation

While you’re thinking about your 401(k) and how to protect it, make sure the asset allocation has your goals in mind. Keep in mind your risk tolerance, which is how much risk you can emotionally handle, but also keep in mind your overall retirement goals. You’ll have to conduct a bit of a balancing act here, but it’s for the greater good of your future finances.

Checking on your account every once in a while, at least annually, is also just a good habit to ensure the vehicle is still running smoothly toward your destination.

There’s no one way to invest a 401(k), but there are rules of thumb, such as the 60/40 (where 60% is invested in equities, and 40% in bonds). If you’re unsure of what you’re looking at, consult with a qualified and trustworthy financial professional — even one who works at the firm housing your accounts — to make sense of it. Here’s a letter I wrote to another reader about making sense of your asset allocation.

Another guideline in the financial-services industry is the 4% rule, which says if you were to withdraw 4% from your account every year, you’d be able to use that account for about 30 years. The percentage itself has been contested many, many times, with some people saying the rate should be far less, but it will give you an idea of how well-suited you are based on your projected financial needs in the future.

The best thing you can do for your future self is maintain the due diligence you’ve already been giving it. You’ve worked hard, saved hard and you’ve got multiple income streams set up for the future — that’s a great start. With a little more research and some action plans under your belt, you’ll be positioning yourself well for the future.

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