As individuals approach retirement many begin shifting their portfolio composition into a conservative allocation, consisting of more bonds than stocks. Bonds have historically provided more security than stocks while generating enough income to sustain a retiree’s lifestyle.
In the present economic environment however, bond yields are hovering at record lows. As longevity and the cost of living increases, the perceived safety of bonds can be negated by the insufficient returns they provide.
How does one mitigate the risk of outliving their assets without assuming too much investment risk in this new environment?