How Much Risk? Retiree Sarah

Real Risk for Real People – Home

Introducing Sarah, the Risk-Loving Retiree

Like Carl, Sarah is a retiree and at 65, three years younger. She’s also in great health. But she can afford to take risks because she is not as dependent on her portfolio as is Carl. While the latter is a divorcee living by himself, Sarah lives with her husband and they combine for more than enough wealth and income from a variety of sources (they have good long-term care insurance policies as well) to allow Sarah’s Portfolio123 portfolio to be allocated to so-called “fun money.”

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In other words, they don’t want to and can’t afford to lose it. But they can well afford to set it apart from the mainstream of their regular needs and assume sensible risks in an effort to grow assets – to fund a few extra cruises and build a legacy for their grandchildren, with who they have close relationships. 

The moral of the story: Don’t assume every penny of a retiree’s portfolio must be invested conservatively. It depends on the resources and needs of each individual retiree.

See Risk Assessment Notes (Cheat Sheet)

The Nature of the Risk-Return Tradeoff

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