re: #22 lawhawk

Hallowed are the Ori. /

Seriously though, if you’re close to retirement, you should have already shifted assets into more stable securities and become less risky in your portfolio. ….. If you’re in a 401(k) and contributing 5% (and maxing out your corporate match), continue to do so. If you think that’s risky, drop the percentage a bit, but make sure to max out the corporate match no matter what…..

Another thing you could do if you’re concerned about a downturn is to park more of your assets in bond funds and cash funds, but also know that it means you don’t see the gains you might otherwise have if you’re buying into a weak market. Only you can judge your risk aversion.

Two issues with this:
1. At one time, the belief was that at retirement, one should avoid risk and look at stable funds. On the other hand, if you have longevity in your family history, you really have to look at a longer period. If you might be living to your nineties, and not your seventies, you need to consider riskier assets to protect against risk of inflation (I know, it’s been very modest now — but that was not so true in the 1970’s and 1980’s).
2 The problem with bond funds that many overlook is that if interest rates start moving up, the value of the bond fund will start dropping and you may discover that you have lost a significant portion of your assets. Cash and shorter term bonds can alleviate that risk.