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Retirement Tip of the Month

Rule of 100

How To Estimate The Amount of Risk in your portfolio using...

The Rule of 100

How much of your portfolio should be in “risky” investments? The rule of 100 uses your age to help you decide. 

The basic formula is this: the number 100… minus your age… equals the percentage of investments in your portfolio that should be considered “risky” in nature. 

For instance, if John is 65 years old, his Rule of 100 calculation would look this this:
100 – 65(his age) = 35% (percentage of risky investments that should be in John’s portfolio)

Therefore, John should have 65% of his money protected in more secure accounts, and only 35% of his money should be at risk in the market.

65% – Safe and Secure
35% – More Risky Investments
100% of John’s Retirement Savings

How The Rule of 100 Impacts You

During younger years, your accounts can withstand the ups and downs of the market. In other words, if a market correction occurs, you account can typically bounce back. However, as you get older, you don’t have this luxury. The less time your account has to adjust after a market drop, the more conservative you should be.

How Messina’s Wealth Management Can Help

As a fiduciary, Nick Messina is bound to do what is best for his clients. He isn’t pigeon-holed into offering just one product. As a result, as your needs change, he can work with you to suggest new options for your money.

We work with clients on both conservative and more risky investments. In other words, we can help you balance your overall portfolio in a way that suits you best. 

Our one on one consultation offers the information you need to help you plan your financial future. Let us help you determine which of your current investments are safe and which are at risk.

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