Conventional financial wisdom says that bonds should comprise an increasing percentage of a portfolio as the owner ages and heads into retirement.
In theory, a retiree’s need for income and a reduced tolerance for risk are the main drivers of the larger allocation to bonds.
A key consideration, though, is...
Mark J. Warshawsky is Director of Retirement Research at Towers Watson.
Dr. Warshawsky served as assistant secretary for economic policy at the U.S. Treasury Department from 2004-2006 and he has held senior level economic research positions at the Federal Reserve Board, the Internal Revenue Service and...
Retirees have every reason to be an extremely risk averse bunch. After all, most of them have an immediate or near-term need to draw income from their assets. This need for income should result in zero tolerance for investment risk or reduction in value of the assets that are intended to produce the retirement income...
The extreme gyrations in the stock market over the past week create great headlines and quite a bit of trading activity. Equally if not more important for retirees, however, is the related action in bond markets.
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Previous articles in this series discussed the financial profile of William--the head of the typical American household that is approaching retirement.
We concluded that it is very unlikely that William will be able to sustain a retirement spending rate that is based on 85 percent of his pre-retirement...
