Unconventional Investing Advice From a Retirement Expert
Wade Pfau, professor of Retirement Income at American College and founder of retirementresearcher.com, argues that the usual advice about investing in retirement — hold fewer stocks and stock mutual funds in retirement, and keep your stock holdings low — isn't the best approach.
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Pfau agrees with one aspect of the standard advice: As you approach retirement, and at the moment you retire, you should be reducing risk, which translates into less of your portfolio invested in stocks and more invested in bonds. That's the approach taken by target-date retirement mutual funds. But as you age in retirement, he says, you should slowly increase the percentage of your portfolio invested in stocks.