By Jeff Bernier via

It’s an investing rule of thumb you probably learned from your grandfather: “Don’t eat your principal!” And Grandpa was no fool. Living off your dividends and assets alone means you aren’t spending down the engine that drives your retirement income. As a result, your principal can continue to work for you for the rest of your life. But while the theory makes sense in some cases, times have changed quite a bit since your grandparents were planning for retirement. And those changes just might mean Grandpa’s guidance is far from the best advice for today.

Consider this scenario: Your retirement is six months away. To prepare, you meet with your financial advisor armed with clear instructions to reallocate your portfolio to tilt towards high-yield, dividend paying, and fixed-income assets. After all, you need to generate income now that your earning years are in the rear-view mirror, so it’s the obvious choice. But is it the best choice for you? Here’s why your grandfather’s trusted rule of thumb may be the very last approach you want to take in 2017:

1. Your life expectancy is wonderfully long! If, like mine, your grandfather retired at age 65 in 1964, his life expectancy was just 67 years old. Your grandmother fared a bit better, with a life expectancy of almost 74.

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