Retired? Don't Dump Your Stocks
For years, seniors have been told to unload their stocks once they reach retirement and move over to safer investments -- namely, bonds. And to an extent, that advice still makes sense. Because stocks are far more volatile than bonds, holding them becomes riskier for seniors. Unlike younger workers, who have time to ride out the market's ups and downs and can therefore afford to invest their nest eggs heavily in stocks, retirees need those savings to cover their day-to-day expenses. And if they keep too much money invested in stocks, and the market takes a dive, they stand to lose a big chunk of their savings without much chance of a full recovery.
But despite the risk involved, if you're retired, it pays to keep a chunk of your portfolio in stocks. If you don't, you may have a hard time maintaining your purchasing power over the course of what could be a very lengthy retirement.
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Source: Fool.com
