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>>401k depends on stock market being up in the critical time you need it. If your portfolio allocation is incorrect, sure. But by the time people get close to
by enraged_camel 9y ago
>>401k depends on stock market being up in the critical time you need it.
If your portfolio allocation is incorrect, sure. But by the time people get close to retirement, most of their investments should be in bonds, which are quite insulated from the ups and downs of the stock market.
- xyzzyz 9y agoWhat do you do when the stock market collapses as you start moving into bonds?
- closeparen 9y agoThat’s something you do by degrees over years. A couple years’ blip isn’t going to hurt that much.
- steelframe 9y agoIf you want to take an ultra-conservative approach, then 7 years from retirement, transfer 7 years worth of expected draws against your portfolio into bonds. If the market crashes the day before the "7 years from retirement" point, then wait 7 years to make that move into bonds and do it just when you retire. If things are in such horrible shape that the market fails to recover over any given 7-year period of time, expect shotgun shells and canned food to be the new currency anyway.