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As a Retiree, How Should I Calculate My Asset Allocation?

Question: When calculating my asset allocation, should I put dividend-paying stocks in the stock or bond category? I’m retired and don’t want to invest too aggressively.

– Jim Hess, Charlotte, N.C.

Answer: You’re on the right track: Loading up on income-producing investments is a tried-and-true retirement strategy. But just because an investment generates a steady yield, it doesn’t necessarily mean it’s a bond. A stock is a stock is a stock, pros say, and while the dividend-paying variety is usually less volatile than its nonpaying cousin, it’s still vulnerable to broader market drops in the same way, says Chad Carlson, a financial planner at Chicago-area wealth advisory Balasa Dinverno Foltz, which has nearly $2 billion under management. So, count those dividend payers among your stock allocation, he says, and consider a general rule of thumb: Match the percentage of your bond allocation to your age.

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    • I WOULD LIKE TO HAVE COMMENT ON RETIREMENT SAVINGS TO KEEP WITH INFLATION I AM 77 AND HAVE 60% STOCK AND 40% BONDS AND MUTUAL FUNDS.HOW WILL i NEED TO REGULATE S&B TO MAKE MY MONEY LAST APROX 600,000.

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    • don’t touch bonds; stocks suck too; travel a little and look for opportunities- Christ, get a life, read Jim Rodgers, Ben Graham…all you losers invest like clueless widows. Buy an armored 4×4 and an armalite and come down to S. America.

    • You want a simple strategy for “balancing” you retirement investments? Invest enough money into Social Security, TIPS, I-Bonds etc. that the income generated covers your basic needs and desires. Then and only then start investing in stocks.

      When you were working – your biggest asset was “you”. Now that you are retired that asset is gone. Secure yuor retirement income with inflation protected, government secured income before risking your future in the stock market.

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