How conservative should my portfolio be as I approach retirement?

I am 66 years old and I am still working. However, I will be retiring within the next year or two. I also have a simple IRA. Do I take less risk or high risk in my portfolio? Do I look for high returns?

Retirement, Retirement Plans
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2 weeks ago
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Just because you are nearing retirement doesn’t necessarily mean you should be more conservative with your investment portfolio.  This decision should be based on what you are spending, what income sources you will have in retirement (i.e. social security, pensions, rental income, etc.), and how long you think you will realistically live.  The key here is to do more in-depth planning (hopefully with a qualified advisor) to find out how much you will need to pull from your investments each year, accounting for inflation, to meet your retiment goals.  If you only need 1%-3% from your portfolio, then yes, your portfolio can be invested conservatively.  If you need 4%, 5%, or more, then a conservative portfolio is likely a guaranteed failure (i.e. you will run out of money before you run out of life).  So, instead of thinking about risk tolerance based on your age or your proximity to retirement, think of it based on your needs and the chances of reaching your goals.  After all, what is really more risky---guaranteed failure, or possible failure with a good chance of success?

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