One of the saddest things I encountered early in my finance career was a gentleman nearing retirement age whose 401k had been sitting in cash his entire career. This was before the days of auto-enrollment or default investment options that employees had to opt out of, and the company wasn’t a new tech startup but an old-school firm. I can only imagine that either the 401k provider was not providing employee education, or management wasn’t advocating for it. The tragedy of lost earnings that could have provided the employee with a better retirement has always stayed with me.

The ability to weather risk is personal, but it’s important not to lose sight of your broader goals and timeline. Cash may reign for some strategies, but being too conservative can also be risky. According to the CDC’s 2022 figures, life expectancy for males increased by 1.3 years, from 73.5 in 2021 to 74.8 in 2022. For females, life expectancy increased by 0.9 years, from 79.3 in 2021 to 80.2 in 2022. Your money has to last a long time, so ensure your investments support that timeline.

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