COVER STORY
Don't Dump Those Stocks
Should you shift 100% of your retirement portfolio into fixed-income investments? Not if you plan to live very long. While the ''bond shelter'' offers the apparent safety of steady income and less volatility, fixed-income returns won't protect your portfolio against inflation. Say you plan to retire at age 65 with $1 million. FinanceWare.com calculated your chances of running out of money before age 85, based on your investment mix and spending rate:
|
| IF YOU SPEND $65,000* A YEAR |
CHANCE OF GOING BROKE BY AGE 85 |
| 100% BONDS | 78% |
| 60% BONDS/40% STOCKS | 5 |
| 30% BONDS/70% STOCKS | 9 |
| 100% STOCKS | 16 |
| IF YOU SPEND $85,000* A YEAR |
CHANCE OF GOING BROKE BY AGE 85 |
| 100% BONDS | 90% |
| 60% BONDS/40% STOCKS | 65 |
| 30% BONDS/70% STOCKS | 29 |
| 100% STOCKS | 43 |
| * Spending rate for first year of retirement, increased by 3% inflation each
subsequent year.
DATA: FINANCEWARE.COM
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INTERACT
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