Asset allocation prior to retirement
Early in their careers, many retirement plan participants are willing to accept more risk to give their savings a chance to grow; accordingly, they invest more heavily in vehicles like stocks that typically have higher growth potential (and higher risk).
As retirement approaches, this picture is likely to change. Preservation of wealth — and reducing investment risk — becomes more of a priority because retirees will need to access their savings soon. Adjusting your asset allocation mix toward a heavier concentration of income-based investments like bonds and fixed interest accounts may help accomplish this.
