The Retirement Investment Paradox

Conventional wisdom for retirement investing has shifted significantly due to three major risks: inflation, increased longevity, and sequence risk. The traditional age-based asset allocation, which suggested a larger percentage of stocks for younger investors and a heavier bond allocation as they age, is no longer sufficient. This is highlighted by the fact that retirees today could live for decades after retirement, thereby necessitating a portfolio that can sustain a longer-term financial strategy. As such, the challenge lies in balancing the need for growth through equities while managing the volatility that can disrupt a retirement portfolio.