How "Safe" is Too Safe For Your Retirement Portfolio?

Ready For Retirement

James Conole, CFP®

Investment Planning, Bonds, Education, Stocks, Cash, Business, Dividend Investing, Retirement Planning, Retirement, Investing, Tax Planning

5 • 706 Ratings

🗓️ 2 June 2020

⏱️ 20 minutes

🔗️ Recording | iTunes | RSS

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Summary

Many of us know people who needed to continue working into retirement in the wake of the 2008 financial crisis. There are benefits and risks to having a diversified investment portfolio, but it would be helpful to know what’s too risky—and what’s too safe. In order to better understand what makes a portfolio safe in the first place is to understand what kinds of risks exist. There are risks across the board, but some kinds of investments carry much more. There are short term and ...

Transcript

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0:00.0	Discover the tips and strategies that will help you achieve your retirement goals.
0:09.3	I'm your host, James Canole, and this is the podcast dedicated to helping you retire well.
0:14.6	It all starts right here on Ready for Retirement. for retirement.
0:29.6	Hi, everyone, and welcome to another episode of Ready for Retirement. I'm your host,
0:35.1	James Cannell. And today we're going to ask the question of how much or how safe is too safe when it comes to your retirement portfolio. We've all heard stories
0:39.1	about people who were invested, maybe it was a friend, maybe it was a family member, and then 2008
0:43.8	happened and they couldn't retire and they had to keep on working a few more years. Or maybe they
0:48.8	were invested in then 2000 to 2002 happened and the stock market decline of that time and they kept working they
0:55.4	weren't able to retire and we hear these stories and what's ingrained into us is as we approach
1:01.1	retirement stocks become very risky and bonds become very safe and so what this leads us to do is we
1:07.8	approach retirement we think okay we can't own any stocks or should own very little in stocks and we should own much more conservative investments
1:13.9	because at that point you really can't afford for your portfolio to go down.
1:17.5	That's true to an extent, but let me tell you about another story. I met with this gentleman
1:21.5	years back and this gentleman had retired in his 60s and in his 60s, he was fine. He had social security coming in. He had a pension
1:29.3	coming in. He had investment coming in. And for the first several years of retirement, he lived
1:34.0	very comfortably. But he was invested very conservative. And so what happened is for the duration
1:40.5	of his 60s and his 70s even, he was just fine. But then in his 80s, all of a sudden,
1:45.5	he was having real trouble meeting basic living expense needs, buying groceries, putting gas in his
1:51.2	car, being able to afford food or utilities or whatever it was. And the reason for that was he was
1:56.7	invested so conservatively, really he wasn't invested, that no, his money never went up and down
2:01.4	because he wasn't invested in the stock market, but his money also never grew for him.
2:06.1	And so he had a very comfortable retirement for the first half of it, but the latter half,
	...

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