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What Asset Allocation Should I Have in Retirement?

Question: I read all the time about what asset allocation you should have 20 or 10 years from retirement, but what about once you’ve retired? Are there “after retirement” mutual funds?

— Bill Shape, Sequim, Wash.

Answer: You’re right — asset allocation shouldn’t go out the window in your retirement years. While there’s no cookie cutter formula, experts recommend striking a balance between conservative, income-generating investments and equities that can help keep up with inflation. With the former, look for shorter-duration bonds and certificates of deposit, so you don’t lose out when interest rates rise, says Ray Harrison, a Roseville, Calif.–based wealth adviser. As for mutual funds, experts suggest income-focused funds with managers who invest in all areas of the market, rather than target-date funds that usually adhere to specific allocations.

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