My brother sent me an interesting link from the NY TimesÂ An Adage Adjustment for Investors at RetirementÂ (remember it has a pay wall), about whether today’s new concept of Seniors holding high equity stakes in their retirement savings really makes any sense at all.
The scariest statement is at the beginning of the article:
Traditionally, retirees have been told to keep a significant slice â€” about 50 to 60 percent of their portfolio â€” in these risky assets
My only question is, “What investment professional is telling seniors this is a good idea?”.
When I started looking at retirement savings, one of the cornerstones of any plan was less reliance on equities after the age of fifty (i.e. you should have enough savings that you use less growth oriented and/or risky investments).
Now given that retirement plans have changed significantlyÂ from when I was 25 (i.e. I managed to stumble into a nice pension plan, which means maybe I can be a little more reckless with my RRSP moneys) I might be one of those seniors who might hold a higher percentage of equities in my investments in my senior years, but if you are relying on this money as your “nest egg”, why would you go for a very risky mix?
I suppose that the bottom line for most folks is when do you stop trying to build wealth (i.e. stay well ahead of inflation, reduce debts and have more than you had yesterday) and when should you be satisfied with what you have? I’d like to hear your opinion on that.