How Much Retirees Should Have in Stocks

This is essential information for everyone's retirement. [Shield] AN OXFORD CLUB PUBLICATION [Liberty Through Wealth]( [View in browser]( SPONSORED [Extreme Dividends: Discover How to Target Ultimate 100% Yields]( With all the stock market fluctuations, you might be inclined to put your money in a low-risk CD that pays 5%. But don't be a chump... 5% is GARBAGE. [Especially when you can buy solid stocks that PAY YOU to own them.]( And get this... with 6 simple steps, you can discover how to target stocks that could ultimately pay you 100% of what you put in... every single year! [Click here for the urgent details.]( EDITOR'S NOTE Day in and day out, Chief Income Strategist Marc Lichtenfeld receives emails from [investors who are in or nearing retirement](. Many of them are understandably frustrated. 2022 was the worst year for the market since 2008... The Fed is fumbling around and making decisions that will ultimately cost Americans a lot of money... And they're slowly watching inflation cut away at [their hard-earned nest eggs](. So Marc is doing something I never thought I'd see... [He's helping everyday Americans QUIT the stock market.]( [Find the important details right here.]( - Nicole Labra, Senior Managing Editor THE SHORTEST WAY TO A RICH LIFE [This Is How Much Retirees Should Have in Stocks]( [Alexander Green | Chief Investment Strategist | The Oxford Club]( [Alexander Green]( At a recent Oxford Club Private Wealth Seminar, an attendee asked a question I've heard countless times before: What percentage of a retiree's portfolio should be in stocks? The answer depends, in part, on your age, your health, your monthly overhead and the size of your portfolio. So let me touch on these briefly and then provide a valuable, real-world solution. It's called retirement rebalancing. Here's why it's essential... Americans today are living longer than ever. If you retire at 65 in reasonably good health, for example, you could be looking at up to three full decades in retirement. Given a 20- or 30-year time horizon, you need a serious slug of equities to generate a long-term return that comfortably exceeds the rate of inflation. Of course, it's hard to estimate how high that inflation might be, especially with a future measured in decades. (Recall the hyperinflationary late '70s and early '80s.) Yet retirees also face the potential threat of having too much money in stocks. After all, when you're young and contributing to your investment portfolio, a bear market gives you wonderful buying opportunities. But when you're out of the workforce and depending on your investments to supplement your monthly pension or Social Security payments, cashing in stocks during a bear market - like the one we've experienced over much of the last two years - can result in a significantly smaller portfolio when the market rebounds. How do you avoid this risk? With retirement rebalancing. Here's how it works... SPONSORED [Marc Lichtenfeld's Coveted "Penny Options" Strategy REVEALED!]( "Penny options" account for 61% of his nearly 100 triple-digit winning investment recommendations... Including top gains of 907% on AbbVie in 10 months... 327% on AutoNation in 58 days... And 442% on Toyota in 10 days. The best part? You could have controlled shares of these well-known stocks for $5 or less. Marc Lichtenfeld reveals the details behind his penny options strategy for the first time. [Click here to discover how you can put fewer dollars at risk and have the chance at huge gains like these.]( Instead of thinking about what percentage of your portfolio is in stocks, begin by calculating how much money you need in lower-risk bonds and cash to fund your monthly overhead. Let's say, for example, that you need $5,000 a month - or $60,000 a year - to cover the difference between any public or private pensions and your monthly overhead. Then set aside five years' worth of living expenses or, in this case, $300,000 in short-term bonds and cash. Here's why... The average bear market in the U.S. lasts 15 months. The average decline is 32%. And the average time to recover to the old high is another 2.1 years. So the average round trip from the beginning of the slide to full recovery is approximately 3 1/2 years. However, sometimes bear markets are more severe and stocks take longer to recover. So let's be conservative and set aside enough money for a five-year round trip from peak to trough to new peak. When the market is at or near new highs, retirement rebalancing means liquidating stocks (not bonds or cash) to pay your expenses and fund that extra year of reserves. When we're in a bear market, however, rather than cashing in your stocks at low prices, you pay your expenses out of your five-year reserve. (And the interest these bonds and cash pay will provide an inflation kicker.) If the market keeps going down, you continue to live off that shrinking reserve and refrain from cashing in your stocks at bear market prices. When the market finally recovers to new highs, you then “retirement rebalance” once more by cashing in enough equities to restock your five-year reserve. This is a workable, real-world solution to the perennial question of how much to keep in stocks. And it allows you to sleep at night because you know you have a multiyear cushion to tide you over during the bad years. What if you don't have a portfolio large enough to set aside five years' worth of expenses? Then you face a different set of options: 1. Work longer 2. Save more 3. Invest at a higher rate of return 4. Set aside a slightly riskier three- or four-year reserve 5. And/or reduce your living expenses. But for those who have stuck to the investment principles I've long advocated - starting early, saving regularly and investing wisely - retirement rebalancing is an effective solution to that age-old conundrum: How much should I have in stocks once I retire? Good investing, Alex [Leave a Comment]( [IU 2024]( WEALTH OPPORTUNITIES - [Sign Up for the New and Improved GVI Investor. First 75 Today Get Thousands Off and Auto-Entry Into a $15K-Value Dream Sweepstakes!]( - [Instead of $96... Marc's Readers Could Have Paid Just $3.30 per Share and Realized a 327% Gain in Just Two Months on One Trade! 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