Why Traditional Retirement Investing Is Broken

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When I became an investment adviser more than 40 years ago, there were a few tried-and-true rules for where to put your long-term savings.

For example, subtracting your age from 100, then putting that percentage of your assets into stocks, the rest into bonds.

Another popular rule was the 60/40 rule: 60% of your savings in stocks, 40% in bonds. The idea was to achieve growth with the stock portion, and income with bonds.

These simple ideas worked for generations. But they don’t work so well anymore.

Why? Because bonds are no longer a safe, reliable income-producing asset. Interest rates are laughingly low, and should rates rise — about the only direction they can go from here — bonds, especially long-term bonds, will take a sizable hit. (Bond prices move inversely to interest rates.)

So, what should investors be doing, especially those approaching retirement? That’s the topic of this week’s “Money!” podcast. We’re going to explore some ideas, see if the 60/40 formula is truly dead, and if so, what we should be doing instead.

Our guest this week is Roger Whitney, star of the Retirement Answer Man podcast and president of Agile Retirement Management.

Sit back, relax and listen to this week’s “Money!” podcast:

Not familiar with podcasts?

A podcast is basically a radio show you can listen to anytime, either by downloading it to your smartphone or other device, or by listening online.

They’re totally free. They can be any length (ours are typically about a half-hour), feature any number of people and cover any topic you can possibly think of. You can listen at home, in the car, while jogging or, if you’re like me, when riding your bicycle.

You can listen to our latest podcasts here or download them to your phone from any number of places, including Apple, Spotify, RadioPublic, Stitcher and RSS.

If you haven’t listened to a podcast yet, give it a try, then subscribe to ours. You’ll be glad you did!

Show notes

Want more information? Check out these resources:

About me

I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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