I don’t disagree that these target date funds are probably good for some folks. I’m more interested in a slightly more hands-on approach. Plus I would expect that there is increased fees for the fact that you’re not only paying the fund manager, but the person managing the group of funds as well. Anyone know?

The reality is a person retiring at 65 can easily expect to live another 15-20-25+ years. You’re capital MUST continue to grow to keep pace with inflation (I don’t buy for 1 second there was zero inflation in ’09!!!).

Bonds alone simply will not keep pace with inflation.

If not for stocks then I don’t know what else to invest in.

Suggestions?

Additionally, whether or not you need to risk a part of your money, and how much you need to risk depends on your net worth. If your net worth is sufficient that you can live in retirement with low risk investments, than there is no reason to risk any of it.

I am not saying every retiree should stay away from the market, but he/she should be careful and don’t take more risk than they need and can live with.

Another thing is that people talk about bonds as if they are risk free low return investments. There are bonds and there are bonds. Junk bonds will give you high return and high risk just like stocks.

Additionally, lots of time things don’t go as planned. You may get sick and want your money sooner or you may be “retired” earlier than you plan against your will – baby boomers who laid off now aren’t finding new jobs, not at all. Conversely, you might just find that you don’t want to retire and want to continue working – either don’t want to give up income or just got to a position in which you actually enjoy your work or just feel bored sitting at home or, especially if you are a woman, don’t want to tell people you meet “I am retired”. I’d rather have flexibility.

If you are young, how do you know how soon you’d want to retire? Our wishes, the way we think, all change as we grow older. When I was 23 I counted on my pension money and was sure I’d work for the same company until retirement, and will retire at 54.5 with full pension and health care in retirement. Than pension plan terms got changed, health care in retirement was gone, then pensions were frozen alltogether. Somewhere along the lines or more precisely during the 90s the promise of employment until retirement was gone too. Still, when I was 40, I was very involved in my work and thought that I’d probably work forever or at least as long as they’ll keep me, and that retiring would be very boring and giving up this nice salary unpleasant no matter how much money I’ll have. Now I am 50, and I think that I’d like to retire in 5-10 years and this income no longer seems that important. But 1) I may be forced to “retire” sooner and 2) if I keep my job, I am not sure how I’d feel in 5-10 years. We change as we grow older and so do our wishes and our circumstances.

Personally, I’d rather adjust my asset allocation based on the conditions of the economy.