If you’re a retiree, you probably still need stocks as a big chunk of your investments.
People make mistake of dropping stocks completely at age 55 or 60, says Susan Garland, editor of the Kiplinger’s Retirement Report.
You do want to decrease your stock exposure as you age, sure. But you cannot drop them:
Stock gains can help sustain your nest egg if you live to 75 or older. They're inflation fighters, and the dividends they provide can be a source of income. Garland says the rule of thumb is that 100 minus your age should roughly be the percentage of stocks in your portfolio.
Here’s what Bill DeShurko, manager of the Dividend and Income Plus investment model at Covestor, had to say about stocks for retirement:
Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures.