THE NEW HOLISTIC RETIREMENT • 33 The Saver’s Dilemma Savers today face something no other generation has faced: the conflux of a volatile stock market and low real interest rates. In Modern Portfolio Theory (which is just a fancy wpraoyteoctfiodnescribing how financial advisors balance risk and in an investor’s portfolio) , the traditional solution for retirees is adjusting asset allocation. 19 If you’ve ee vf fei cr i ehne ta rf rdo an tfiienra, ”n ct hi ai sl pi sr owf ehsasti ot hn ea yl tma leka anb. oEus st e“nmt iaanl layg, i snagv tehr es at hdej ui rs tf uhnodws f trho emi r hai gs hs eetrs- r ai srke / ha li lgohceart -erde wa as r tdh oe yp t iaognes, lmi koev ti nh ge stock market to lower-risk/lower-reward options like CDs. But, as you just learned, that model is insufficient in tcoa dn a’ typ’ sr oi vn itde er eesnt oruagt he gernovwi rt ohntmo emnat k. eL ot hwi se rp-or ri st kf o liinos at rpupmr oeancths work for many savers. This tug-of-war between risky growth in the market acrnedatecsonsosmerevtahtiinveg I nliokne -tgorocawllththein“Safvixeerd’s Dinilceommmea.”vehicles In your IRA or 401(k) , you’re trying to both grow and pr irsokt eocf tt hy oe umr af ruknedtsa. nYdo uh ohpa ev et ot oa cmc easkse hai gdheecri sgi or onw: At hc ,c eo pr tt at hk ee tmheeapnrinogtefuctliroenalorfeCtuDrsnas.nd money market funds but give up Most of us compromise between the two, balancing amnodr er ecbo anlsaenrcviantgi v eo uorp tpi oonr tsf. oWl i ohsa tb et ht wi s eme ne atnhse i sm, aorf kt eent , aonudr astcacyoiunngtlsesasrperogtreocwteidngthasnlowwee’rd ltihkaen. they could be while COVID didn’t create the saver’s dilemma, but it sure da ni dd epxraocteercbt aytoeuirt .rIent itrheempeonst tf-uCnOdVsI. D e r a , i t ' s h a r d e r t o g r o w 19 James Chen. Investopedia. August, 29 2023 . “Modern Portfolio theory (MPT).” https://www.investopedia.com/terms/m/modernportfoliotheory.asp
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