There are a lot of definitions for risk, all of which seem to point to the potential for loss rather than the expectations of gains.
Back in the day, the idea that memorization was the key to being smart, the ability to summon a phrase from Whitman or Shakespeare, or a definition or as someone who attended parochial schools, each line of the Baltimore catechism. Ironically, the effort was designed to make us more than just simply smart; it would make us eloquent.
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We like to think, even assume that we are reasonable. When it comes to investing, this “reason” is often called rational and when it comes to retirement, the rational is often the replacement for risk. Three Rs: reason, rationality, and risk and each one plays a role in our success and almost just as often, our success at investing, both in the present tense and in our future plans. Which makes the argument that safety somehow plays a role in not only how far we go but how long our money is likely to last.
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I Resolve: Six Resolutions for Retirement Planning in the New Year
If you consider yourself a Baby Boomer, the reflection in the mirror is an image that polarizes: we are comfortable in the what the future holds or we are worried. There is good reasons for this feeling of either hope or dispair, with no real middle ground. This group has seen the demise of the defined benefit plan (pensions) and the introduction of the defined contribution plan (401(k)). You have seen the greatest bull market in investing history and witnessed two major crashes that have rattled your confidence in the decade following. You are the first generation to realize that your future is in your hands and you were not ready for the responsibility.See more ›
Posted in 401k, Boomers, commentary, debt, ETFs, exchange traded funds, financial planning, index funds, IRA, Paul Petillo, Repercussions: A Retirement Review, Retirement Planning Target 2025, risk, women and finances, women and retirement