Preparing for Retirement in an Uncertain World

In previous generations, many workers could expect to automatically receive a steady stream of retirement income from Social Security and a pension from their union or employer. Like Social Security, traditional defined benefit pension plans promised a monthly annuity for life. Along with personal savings, pensions and Social Security were the mainstays of retirement. Increasingly, however, American workers must make their own retirement investment decisions. Lifecycle investment strategies offer one of the best choices for personal retirement investment. They reduce the risks of volatile stock prices by gradually shifting the mix of investments from stocks to bonds as an individual ages. As the individual approaches retirement, the portfolio becomes increasingly less risky.

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