Financial Dilemma: I’m Out of Time

By Allison Berger via

“I can’t afford to lose any money at this stage, I’m out of time.”

This is a phrase we hear occasionally from clients in or on the cusp of retirement, though not as much lately in this raging bull market.  Typically, the intent is to design a portfolio that will not ever go down in value while providing a healthy income stream in retirement.  Many are fearful and risk averse at this stage of the game, and for good reason considering that sequence of return can have a significant impact on the long term success of your retirement plan.

In investing, time is everything.  If you need all of your money in the next 3-5 years, then you likely should not be invested in the stock market.  However, I have heard this phrase from clients as young as their late 40s.  It is important to remember that even if you are retiring, it’s likely you still have a fairly significant time horizon, potentially even 30-40 years, maybe longer considering advances in health care.  A time period this long likely requires an allocation to risk assets if you want to avoid running out of money over the long term.  Especially considering the alternative of moving to cash and earning 1% or less for the rest of your life.

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