Today I’d like to continue with this video series, which is “Ten Financial Commandments for Retirees.”
And Commandment # 3 is to Implement the correct asset allocation: For many retirees, gone are the days of retiring in your mid-60s, getting a gold watch, collecting a few years of social security, and dying a few years later. In the United States, a 65-year-old male can statistically expect to live another 17 years on average, until around age 82, while a 65-year-old female can expect to live another 19.7 years, until around 85, on average. In my practice, I have multiple clients who are in their mid-90s and are still mentally sharp and in decent physical health.
These numbers mean that you should plan for a long retirement and your money should be invested accordingly. This necessitates investing in assets, like stocks, that will outpace inflation in order to maintain your purchasing power in retirement. However, it’s important to also maintain enough cash and bond exposure in case the market crashes. A properly structured portfolio should position you to withstand any market downturn, while still allowing you to maintain your lifestyle in a 30+ year retirement.