The old adage about asset allocation during retirement
Retirement Planning July 3rd, 2008The old adage about asset allocation during retirement was this: Take your age, subtract it from 100 and that is the amount your portfolio should be exposed to stocks. However, your advisor shouldn’t still be using this outdated formula. That’s because if you’re fortunate to see 90 it means your account not only needs to generate 25 years of income but it will also experience several up and down market cycles. To be locked into such a conservative portfolio, especially when the market rallies, could actually cost you returns. "That isn’t going to get the job done," says Jeff Buetow, the chief investment officer of XTF, an investment shop in New York. Today some advisors suggest subtracting your age from 120 instead.
Tags: retirement
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