HOW CONSERVATIVE SHOULD
YOUR RETIREMENT PORTFOLIO BE?
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Tyler Cunningham,
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Tessa Hall
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About This Episode
Can being too conservative with your investments create risks of its own?
In this episode of Healthy, Wealthy & Wise, Tessa Hall speaks with BWFA Financial Planner Tyler Cunningham about balancing stability and growth throughout retirement. Tyler explains why moving too heavily into cash and bonds may reduce market volatility but can also limit long-term growth and purchasing power.
They also discuss how cash, fixed income, and growth-oriented investments can serve different purposes within a retirement portfolio. Ultimately, the right balance depends on your income needs, financial situation, risk tolerance, and long-term goals.
Explore how BWFA can help you build a financial plan designed around your retirement goals by visiting our Financial Planning page.
What You’ll Learn
How conservative should your retirement portfolio be?
A retirement portfolio should balance stability with enough growth to support the investor’s long-term needs. Holding too much in cash and bonds may reduce market volatility, but it can also limit growth and expose retirees to purchasing power risk. Because retirement may last decades, the appropriate balance should reflect longevity, income needs, risk tolerance and the investor’s broader financial plan.
Should retirees still invest in stocks during retirement?
Stocks may continue to play an important role in a retirement portfolio, depending on the investor’s circumstances. BWFA Financial Planner Tyler Cunningham notes that even a 75-year-old retiree could have another 20 years to plan for. Maintaining some growth-oriented investments may help a portfolio keep pace with inflation and support financial needs later in retirement.
How can retirees manage market volatility without becoming too conservative?
Retirees may be able to manage volatility by maintaining cash and fixed income investments for near-term expenses while allowing growth-oriented investments time to recover. Tyler discusses keeping different levels of risk within a retirement portfolio. Having more conservative assets available for withdrawals may reduce the need to sell stocks during a market downturn.
Should your investment strategy change as you get older?
Age alone should not determine a retiree’s investment strategy. Income, expenses, pensions, risk tolerance, future needs and the intended purpose of the assets should also be considered. For example, assets intended for future generations may be invested differently from money needed for current living expenses. Ultimately, portfolio decisions should be evaluated within the retiree’s broader retirement plan.
More from the Investing In Your Retirement Series
Episode 1: Could Your Withdrawal Strategy Hurt Your Retirement?.
Episode 2: How Much Cash Should You Keep in Retirement?
Episode 3: How Conservative Should Your Retirement Portfolio Be?