Investing During Retirement

Avoiding Shortfalls

Being too conservative with
your portfolio while retired can inevitably lead to failure.

Six traditional retirement investment portfolios were analyzed over 55 rolling 35-year periods from 1926 through 2014 to see how long each portfolio would have survived assuming different withdrawal rates. The portfolios are listed below from most conservative to more aggressive.

  1. 100% cash

  2. 100% US bonds

  3. "Age-in-Bonds"—allocation to US bonds equal to the age of the investor from age 65 to age 99, with the remaining balance allocated to the S&P 500 index. Thus, when the investor was age 65, the portfolio was 65% in US Bonds and 35% in the S&P 500 Index, etc.

  4. 40% S&P 500 Index/60% US bonds

  5. 60% S&P 500 Index/40% US bonds

  6. "Four-Asset" Portfolio—25% divided equally amongst the S&P 500 Index, U.S. small-cap stocks, U.S. bonds and cash

Likelihood of a Portfolio Lasting 35 Years. The table below shows the percentage of time each portfolio studied lasted for 35 years given the specified inflation-adjusted withdrawal rate. Values below 100% (shaded orange) indicate that the portfolio ran out of money at some point during the periods studied.



The failure of each traditional portfolio studies can be directly tied to the inadequacy of the expected long-term investment return of any portfolio that locks in a fixed amount of stocks and bonds.

HORIZONTM offers historical long-term investment return far in excess of any of the studied portfolios therefore providing you with the best opportunity for retirement income security and flexibility.

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