- by T.Z.
Mistake 2: Not Investing Aggressively Enough
There could be a tendency to not actively invest, or even cash out on all current investments once you reach retirement age. But this isn’t a wise financial decision.
Why This Is a Mistake
Retirement is not the end of your financial journey; in many ways, it is only the beginning. According to the Society of Actuaries (via Vanguard):
“A 65-year-old man has a 41 percent chance of living to age 85 and a 20 percent chance of living to age 90. A 65-year-old woman has a 53 percent chance of living to age 85 and a 32 percent chance of living to age 90. If the man and woman are married, the chance that at least one of them will live to any given age is increased.”
Because your retirement is not the end of your financial life, you still need to invest a portion of your retirement nest egg for growth. What percentage and how your overall portfolio should be allocated will vary based on factors unique to each retiree’s situation. Being too conservative can result in outliving your money in retirement.
No matter what your unique situation is, the key to a good retirement investment strategy is diversification, which means investing in all asset classes: stocks, bonds, real estate trusts and more.