As my friends and family members know, I am a big chicken when it comes to owning stocks these days, given multiple worldwide political hotspots  and a job-starved, regulation-happy, debt-burdened domestic economy.  Oops,  forgot to mention the lack of leadership in Washington.    My trepidations have thus rendered me rather useless in helping others take care of their retirement planning, as several will quite willingly attest.

A finance prof at a small Philadelphia college (Wade Pfau) and a Virginia-based financial adviser (Michael Kitces) have turned my thinking upside down and maybe provided me with a window to be more effective.

99% of financial advisers will tell the newly retired  to put 50% to 70% of liquid net worth into stocks of some form, tapering that exposure as the retiree ages.  That strategy has never made common sense to me, even with dollar-cost averaging entry, given the volatility in worldwide equities and risk of major loss during the first ten years of retirement.  What in the world would I do now if I had to go back and make an honest living, having taken a 35% net worth hit a few years into retirement ?

Pfau and Kitces suggest cutting equities exposure back to 20-25% at retirement to preserve the sound financial basis for your retirement decision, and to become accustomed to the household retirement budget, then gradually adding to that exposure in each of the first ten years.  The idea is to protect your capital early in retirement, avoiding major hiccups that make for sleepless nights, then use dips in the market  to slowly add exposure thereafter.    Makes more common sense to me than the standard plan pushed by the 99% of advisers mentioned above.    WHAT THE HECK !