Chapter 8. Spending Your Retirement in Monte Carlo
“...I am getting older, closer to retirement and can’t afford to take financial chances, so I am going to invest my money in bonds....”
I’ve already mentioned one of the most widely cited general rules in the field of retirement investment planning: that the percentage of your portfolio that should be invested in the stock market is 100 minus your age. So, if you are 70 years old, you should only have 30% in the stock market, by 80 you should only have 20%, and so on. Some recent variants of this rule have upped the number 100 to 110 or even 115, but the same idea applies. According to this thinking, your age is the most important determinant. Indeed, I have spent a good amount of time ...