top of page


After several market plunges, some investors are saying that they don’t need nor want stocks. They want something safer - could they do that? Well, they can as long as they have a large enough portfolio that will produce what they require for income without stocks – on today’s interest rates. That will take a rather large portfolio. Or, if they are able to live comfortably on a very low withdrawal rate – then they can do it, as well.

With a 100% fixed-income portfolio, taking out 3% (adjusted for inflation) would leave you with an 80% chance of the money lasting 30 years. But, could most manage on a withdrawal of only 3% of the portfolio? In many cases, the answer is “no”. Even going from a 3% to a 4% withdrawal rate makes a huge difference over time.

That said, you don’t have to go overboard. Those of you who have been listening for some time know that we recommend a diversified portfolio of approximately 50%-50% between stocks and bonds. Leaning more toward equities may enhance your financial security.

One benefit also is that stocks can help you maintain a higher balance in your portfolio than could a more conservative mix. In the event your spending creeps up, the equities in your portfolio will help you meet those expenses over time.

If folks do not have a pension (and what are those these days?) and little equity in a home that they want to use for retirement income, then they may want to be on the more conservative side of investing.

Like everything else in financial planning, it depends on the individual situation and tolerance for risk.

Source: Linda Barlow, CFP

For more financial articles and tax tips, please visit WISE website at

bottom of page