50’S AND 401K QUESTION
My partner and I each have 401K’s. We invest approx. 15% of our income into our 401k’s. We are at an above average risk due to the 20 years we still have to work. My partner listened to you today and said it’s time to get into a lower risk bracket.
1. Where can i listen to your speaking event from wgn today?
2. We’re both in our early 50’s and only have about 75K in our 401K (combined). Since we started so late I’ve had us in an above avg. risk category. Would it be safe to say we should lower our risk category due to the next 10-20 yr outlook?
Terry Says
If you’re in your early 50s, it’s likely that you will continue working for at least another 15 years. And, as I’ve often noted, there has never been a 20-year period when you would have lost money in a diversified portfolio of large-company American stocks, with dividends reinvested. Even adjusted for inflation. That “portfolio” the the S&P 500 fund, which is likely inside your 40l(k). But if you think you would panic in an extended bear market, then make sure at least 60 percent of your money is invested in the stock portion of your plan, and move perhaps 20 percent to the”stable value” or safety fund inside the plan. That should give you the courage to ride out a bear market — AND KEEP INVESTING — even when the stock market makes headlines to the downside.
