End Up King of Mountain With the Glide Slope
MIAMI (TheStreet) -- It's critical that you take the right amount of risk at each stage to position yourself for a safe, secure retirement. If you don't take enough risk you may never accumulate enough for retirement. But if you take too much the probability of a successful retirement may actually decrease.
Here's an easy way to estimate how much risk you should take at each stage of your career.
|You need to be sure you're in control of your risk while on the slope toward retirement.|
The most important factor to consider is your time until retirement. Early in your career, time is on your side; it makes sense to have a high exposure to equities to capture their higher return potential.
As you approach retirement, you will need to balance your need for liquidity and safety by reducing your equity exposure somewhat. You never outgrow your need for equities, though. Even at advanced ages it makes sense to hold a healthy position in the world's stock markets.
As a guideline, we've developed the glide slope approach that smoothly transitions investors as their careers progress. Because not all investors have the same risk tolerance or financial situation, the glide slope provides for a range of reasonableness. We believe the suggested portfolios are prudent, time tested and offer the highest probability of success over your career: