These Investing Mistakes Could Ruin Your Retirement! Is Your Nest Egg Safe?

Credits Will Do Fine!

I've seen a lot of things in this galaxy but one thing that always surprises me is how people handle their credits. These so called 'experts' are saying that if you're stashing all your retirement money in just cash and bonds you might as well be feeding it to a Sarlacc. I’ve had bounties safer than that strategy! Apparently you need some 'stocks' – whatever those are – to keep your retirement from going belly up faster than a Jawa selling faulty droids.

Longevity Risk? Sounds Like a Krayt Dragon!

This 'longevity risk' they talk about? Sounds like something you'd find on Tatooine maybe a Krayt dragon in disguise. It means you might live longer than your credits do. Back in my day life expectancy was about the same as a Womp rat’s attention span but now folks are sticking around like mynocks on the *Razor Crest*. More power to 'em I guess but you gotta have the credits to back it up.

Volatility: This Is The Way... To Panic (Maybe)

Now I get it. When the market gets twitchy you wanna run and hide like a scared porg. These 'stocks' can be more volatile than a rancor in a bad mood. So yeah dialing back your stock exposure over time makes sense especially if you need those credits soon. But going full on cash and bonds? That’s like facing a Mandalorian in beskar armor with just a vibro knife – you're gonna have a bad time.

The Way of the 10% Return: I Have Spoken!

Apparently these 'stocks' have historically returned about 10% per year outperforming bonds. It's like getting paid extra credits for a job well done! Judith Ward and Roger Young at T. Rowe Price say your portfolio needs to keep growing to support you and they ain’t wrong. Retirement can last decades which is longer than I've spent tracking some bounties.

Age Minus 110: This Is the Math!

So how much should you stash in these 'stocks'? One 'rule of thumb' is to subtract your age from 110 or 120. If you are 65 like some of my…less agile contacts a 50/50 split between 'stocks' and bonds might be a good starting point. Someone in their 70s? Maybe 30 50% in stocks. But remember this is just a guideline. Every bounty hunter – I mean retiree – is different.

Diversification: Not All Eggs in One Beskar Basket

And here's the kicker: Don't put all your credits in one basket or in this case one 'stock'. Diversify! A total market index fund? Sounds like something I'd use to track down a particularly elusive bounty. And have separate buckets of bonds and cash to pull from when stocks take a dive. This is the way… to not end up begging for scraps on Nar Shaddaa.