When you win the game, that is, when you have saved all you need to save to enjoy a comfortable retirement, Dr. Bill Bernstein says it’s time to stop playing the game.
I have a very different attitude. I prefer not only to continue playing the game, but to take risks that I wasn’t comfortable taking before.
There were several ideas worthy of discussion, most importantly, knowing when and how to reduce your level of risk to be a winner at the retirement game.
For a younger investor, stocks aren’t as risky as they seem. For the middle-aged, they’re pretty risky. And for a retired person, they can be nuclear-level toxic.
If you dream about taking an around-the-world trip, and the risk portfolio does well, you can use it for that.
I realized that the cohort that started working during the worst of economic times is the one that did the best.
Instead of cutting your stock allocation one percentage point a year — the standard formula — in a year with absolutely spectacular returns, you might want to take 4% or 5% off the table.