Here’s the frustrating part:
Most people are making it while trying to do the right thing.
They’re not chasing hot stocks.
They’re not gambling with their money.
They’re following advice that sounds reasonable.
Yet it’s quietly putting their retirement at risk.
Let me show you what I’m seeing — and what to do instead.
Two Very Different Paths. One Very Costly Outcome.
When I look at retirees and near-retirees, I see two common paths that lead to the same problem.
Path #1: “I’ll Just Keep Doing What’s Worked”
These are disciplined savers and investors.
They’ve done a great job.
Their portfolios are often heavily invested in U.S. stocks — sometimes tech-heavy, sometimes broad market funds like the S&P 500 or NASDAQ.
And honestly? That approach probably worked really well.
So the thinking goes:
“Why change now?”
That question makes sense.
But it can also be dangerous.
Path #2: “My Advisor Put Me in a 60/40 Portfolio”
The second group works with an advisor.
They’re typically placed into a familiar mix:
- 60% stocks
- 40% bonds
It sounds balanced. Responsible. Age-appropriate.
But here’s the uncomfortable truth:
Many of these portfolios aren’t built around you.
They’re built around a template.
Different path. Same issue.
Why This Matters More Than Ever
Retirement today is harder than it used to be.
- People are living longer
- Many are retiring earlier
- Market volatility isn’t going away
At the same time, much of the advice has become overly simple.
And simple solutions don’t hold up well in a complex retirement.
Mistake #1: Assuming What Got You Here Will Get You There
Let’s look at a simplified example.
Imagine someone retiring with $2 million, invested mostly in growth-oriented stocks. They plan to withdraw about 5% per year.
Then a year like 2022 hits.
Markets fall sharply.
Withdrawals still happen.
Now you’re not just dealing with a market decline — you’re combining losses and distributions.
This is what we call sequence of return risk.
It’s not about average returns.
It’s about when returns happen.
A big decline early in retirement can permanently change the trajectory of your plan — even if markets eventually recover.
This is where many well-intentioned DIY investors get blindsided.
Mistake #2: Accepting a Cookie-Cutter Portfolio
Now let’s flip to the other side.
A retiree with strong Social Security, maybe a pension, modest spending, and a paid-off home.
They might only need a relatively small amount from their portfolio each year.
Yet they’re placed into the same 60/40 mix as everyone else.
Why?
Not because it’s wrong.
But because it’s default.
The real question isn’t:
“Is 60/40 good or bad?”
It’s:
“Is this right for you?”
The Real Purpose of Bonds (And Why This Matters)
Bonds aren’t just about dialing down risk.
At Root, we think about them strategically.
Their most important role?
Protecting against sequence of return risk.
Short-term, high-quality bonds can act as a buffer — a reserve you draw from when markets are down, instead of selling stocks at the wrong time.
We call this Root Reserves.
The key point:
The amount you hold shouldn’t be arbitrary.
It should be tied directly to your cash-flow needs.
A Better Way to Build a Retirement Portfolio
Instead of starting with an allocation, start with your life.
Ask better questions:
- How much do I actually need from my portfolio?
- What happens if markets struggle early in retirement?
- How flexible is my spending?
- What changes if one spouse passes away?
From there, you can design:
- A plan
- Then a portfolio to support that plan
Sometimes that leads to a 60/40 mix.
Sometimes it doesn’t.
The difference is intention.
The Biggest Risk Isn’t Volatility
Volatility is normal.
The real risk is a mismatched portfolio — one that doesn’t reflect:
- Your income sources
- Your spending needs
- Your timeline
- Your priorities
Your portfolio shouldn’t be based on your age alone.
It should reflect your life.
Ready to Make Sure Your Portfolio Fits You?
If you see yourself in either of these scenarios — doing it all yourself or sitting in a generic allocation — it may be time for a second look.
You can schedule a call with the Root team to walk through your situation, your cash-flow needs, and how your portfolio fits into the bigger picture.
No pressure.
No cookie cutters.
Just a conversation about what actually makes sense for you.
👉 Schedule a call and take the next step toward a portfolio built around your life.
The information presented is for educational and informational purposes only and should not be construed as personalized investment or financial advice. The content discusses general retirement planning strategies and is not intended to recommend any specific course of action for any individual.
Social Security claiming strategies involve a number of variables, including life expectancy, portfolio returns, tax considerations, and personal circumstances. Decisions regarding Social Security benefits should be made in consultation with your financial advisor, taking into account your full financial picture.
Examples provided are hypothetical and for illustrative purposes only. They do not reflect any specific client situation and should not be relied upon for investment decision-making. Past performance of investments is not indicative of future results. All investing involves risk, including the potential loss of principal.
Root Financial Partners, LLC provides tax planning as part of its financial planning services. However, we do not provide tax preparation services, represent clients before the IRS, or offer legal advice.
Clients should consult their CPA or attorney before implementing any tax or legal strategies discussed. Nothing in this video should be interpreted as a recommendation to take a specific tax position or legal action.
This content may include discussions around advanced financial planning strategies such as Roth conversions, backdoor Roth IRAs, tax loss harvesting, charitable giving, estate planning tactics, or Social Security claiming strategies. These concepts are general in nature and are not personalized advice. Actions related to these strategies may trigger tax consequences or legal implications. Always consult with your CPA or attorney to assess suitability based on your personal financial circumstances.
Suitability for these strategies depends on your individual tax situation, income, age, investment profile, estate plan, and other factors. Actions related to these strategies may trigger tax consequences or legal implications. Always consult with your CPA or attorney to assess suitability based on your personal financial circumstances.