Ken Fisher on the Retirement Date Fallacy

Investors often misinterpret their investment time horizons—or how long they need their portfolios to last. In this video, Ken Fisher, founder of Fisher Investments, discusses this common retirement investing mistake that he sees investors make time and time again.

Perhaps the most important step in forming a cohesive investment strategy is determining your investment time horizon. Many investors mistake their investment time horizon for the year they plan to retire rather than the year that they need their money to last through. With target-date funds growing in popularity, this is a blunder that is becoming more common as the years go on.

Investors frequently target the year that they plan to retire, failing to account for the fact that they may need their money to continue growing to provide ongoing cash flows in retirement. However, investing too conservatively too quickly is a mistake that may increase your chances of running out of money in retirement. Fisher Investments believes considering your average life expectancy and family health history is a much better way to begin estimating your investment time horizon. But it likely doesn’t end there. Considering your goals and potential inheritors may mean your investment time horizon extends far beyond your own lifetime.

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[Ryan_Tinney]

Came for the knowledge, stayed for the hand gestures.

[francinegray]

You are right...so many are in target funds based on retirement age. The plan should not be on auto pilot but really looked at on an individual basis

[sheltonbridgesjr]

Always thought provoking and rational.