How Much Risk Should Retirees Take?

Morningstar columnist Christine Benz notes how many pre-retirees and retirees are reluctant to lighten up on equity risk despite very strong market gains in recent years

Christine Benz 8 April, 2019 | 2:14PM

Next egg for retirement

I've been thinking a lot about the "fear/greed cycle" lately, specifically the "greed" part.  

The fear part is that investors often get excessively spooked in periods of extended market weakness, switching to cash and bonds and reducing their ability to participate in risky assets' eventual recovery. This happened during and in the wake of the last market downturn; even after the market started to recover in early 2009, bond funds continued to receive the lion's share of new fund flows.

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About Author

Christine Benz

Christine Benz  is director of personal finance at Morningstar and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances.

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