As a certified financial planner (CFP), a challenge I must often overcome as I meet prospective clients who are looking for the safest pathway to retirement, is their inclination to move their money into low-risk investments.
However, one of the most important lessons in retirement planning is understanding that risk exists. It doesn’t disappear when you remove volatility, which represents short-term price movement, not long-term failure. In retirement planning, the key risk is not volatility itself, but whether a portfolio can sustainably support spending, outpace inflation and last over an uncertain lifespan. Therefore, conservative portfolios can expose retirees to a different — and often more dangerous — set of risks that are frequently misunderstood or ignored.
