Managing Your Money After Retirement
Taking the Right Kind of Risks
The greatest challenge in investing as we age is to resist the urge to stop taking financial risk. In our minds, we are playing it safe by eliminating stocks or other riskier investments from our portfolio. We don’t want to “run out of money” in our old age. However, by taking fewer risks we are increasing the likelihood that our worst dream will come true.
Let’s take a look at how taking risk is an essential part of providing for the end of your life. As we know, the risk as we age is that we will outlive our money. This means we need to have a portion of our portfolio in stocks or other instruments.
What Are the Right Kind of Risks
As with anything in investing, you and your investment professional should determine your personal asset allocation. Asset allocation is the secret formula for your portfolio. This topic will be discussed in another article.