As part of our practice we rebalance our client’s portfolios regularly. Everyone, even my clients with a conservative risk tolerance, has some portion of their portfolio in stock mutual funds. Recently I read an article that stated “You shouldn’t own any stocks as a retiree”. This is the wrong advice. If you plan on living any length of time in retirement, you need equities to stay ahead of inflation. We have not had to deal with much inflation over the past 10 years, but we all know it is here now. Everything is costing more. Retirement money shouldn’t just sit in cash. Rather, it should stay invested so it continues to grow. Now you’ll often hear that owning stocks in retirement is a risky move you should avoid. But actually, not only is it OK to hold stocks in your portfolio as a senior, but you should hold stock mutual funds so your IRA or 401(k) can keep gaining value even as you take withdrawals.

But dumping your stock mutual funds completely could cause your nest egg to dwindle faster than you’d like it to.

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