Focusing on only one risk
Most people need to get substantial returns on their portfolio to arrive at retirement with a decent-sized pot of money. That means investing in stocks is actually a prudent move. However, some people believe they can get by without investing in stocks at all. Avoiding stock market risk increases other types of risk, like the possibility of outliving your money.
“A CD is a low-risk investment,” Munnell says, “but (it) produces very low levels of investment income. Savings rates would have to be extraordinarily high in order to reach the target asset accumulation needed to achieve retirement security.”
