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I'm between you two on this. The GenX cohort (I'm on the older end at 53 BTW) is caught in a bind. No, those near retirement shouldn't have all of their assets

I'm between you two on this. The GenX cohort (I'm on the older end at 53 BTW) is caught in a bind. No, those near retirement shouldn't have all of their assets in volatile investments. But also no, they shouldn't have all of their assets in super-safe low-yield investments either because compounding is an essential part of building up a retirement fund. The transition from prime-earning-years portfolio choices to near-retirement (and then actual-retirement) portfolio choices is far from simple. Also, keep in mind that even supposedly-safe types of investments got hit pretty hard in that downturn. Top-rated funds were actually far riskier than anyone knew because of the ratings shenanigans that were part of the MBS/CDO/etc. mess. Home values also declined sharply. Many lost their jobs, so they had to draw from already low and declining retirement funds. I was fortunate. Many of my friends were not. While I'm proud of having made choices that preserved my ability to provide for my family, I wouldn't be so quick to criticize others whose rationally-equivalent choices turned out much worse.

saltcured 8y ago
If you are nearing retirement, you should already have moved some of your portfolio into low volatility assets. Those are the ones you should then be prepared to draw on in the immediately coming years. Retirement shouldn't viewed as an event. You don't just cash your chips one day. It will be a phase of life where you have to continue to do a mixture of short term and long term planning. The more volatile assets, if sensibly diversified, were not "wiped out" in 2008. The paper value dropped but then rebounded. As a GenX worry wort, I watched my own retirement account do this dance. I also watched my cash accounts slowly deteriorate against inflation. I am too risk averse to have gone all-in on the stock market even in my younger years, so had a portfolio mix more like someone 15-20 years older. If I'd been forced to live off my multi-year cache equivalent reserves, my 401K equivalent investments had mostly bounced back before I had to think about tapping any. What was the worst in 2008 were those who had gone all-in on the housing market and turned out upside-down. And, those who still counted on a pension as a large part of their retirement plan and saw their pension providers going bankrupt. Those were really wiped out.

saltcured 8y ago

If you are nearing retirement, you should already have moved some of your portfolio into low volatility assets. Those are the ones you should then be prepared to draw on in the immediately coming years. Retirement shouldn't viewed as an event. You don't just cash your chips one day. It will be a phase of life where you have to continue to do a mixture of short term and long term planning. The more volatile assets, if sensibly diversified, were not "wiped out" in 2008. The paper value dropped but then rebounded. As a GenX worry wort, I watched my own retirement account do this dance. I also watched my cash accounts slowly deteriorate against inflation. I am too risk averse to have gone all-in on the stock market even in my younger years, so had a portfolio mix more like someone 15-20 years older. If I'd been forced to live off my multi-year cache equivalent reserves, my 401K equivalent investments had mostly bounced back before I had to think about tapping any. What was the worst in 2008 were those who had gone all-in on the housing market and turned out upside-down. And, those who still counted on a pension as a large part of their retirement plan and saw their pension providers going bankrupt. Those were really wiped out.