Better Ways to Allocate Retirement Protfolios
What is the likelihood of having enough money in retirement based on how you’ve allocated your portfolio? I’m one who lets the numbers do the talking, so here is some fascinating research on the effects of asset allocation significantly altering one’s success rate in retirement based on portfolio allocation, time frame, savings rate, and withdrawal rate.
The article below explains the relationship of these factors by analyzing 89 years of data on different portfolio allocations and showing the correspondent success rates in retirement years. In other words, there is a relationship between the amount of risk you’re willing to assume, your time frame, savings rate, and withdrawal rate. If you are comfortable being more risky over a longer period of time, you may not need save as much. Whereas, if you are not comfortable assuming more risk, you may compensate by saving more over a longer period of time, else inflation erodes the purchasing power of your dollars. Remember past performance is not indicative of future performance.
These are good points to reiterate, as we make it a point at LJCooper to make sure you have appropriate diversification and allocation in your portfolios. We structure your portfolio in way that addresses your time frame and risk tolerances and diversifies your holdings.
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