The theme this week on the Retirement Quick Tips Podcast is: Listener Case Study: One Year To Retirement. About a month ago, a listener of the podcast emailed me with some questions about her upcoming retirement and this week, I’m addressing the multitude of issues she’s facing as she nears retirement. 

Today, I’m talking about the biggest problem that Monica is trying to solve right now, and that is getting out of the stable value fund in her 401k and back into stocks. 

Monica writes in her email: “Up until recently I was aggressively invested in stocks in my 401k. I was always calm about market fluctuations. However, now as I approach retirement all the volatility in the world and in the stock market has me worried. In January I moved all my 401k funds into the stable value fund. Prior to that I was invested in primarily large cap funds. 

I know I cannot keep it all in the stable value fund long term so I am looking for an allocation strategy when I feel ready to [get back in the market]. I am not a fan of bonds and I think the stable value fund is a better choice for now. I would be willing to leave some money in there as I reallocate other funds into stocks to hopefully increase [growth] in retirement.”

Monica is right - sitting on cash is not a long-term strategy for investing for retirement. What I recommend for Monica is gradually getting back into the stock market over a period of 6-12 months. But not 100% stocks like she was before. She probably should get to a stock allocation that is in the 40-60% range. The exact amount will depend on some other factors other than her age, but that’s a good range to shoot for. 

• Pick an allocation. Pick a timeframe. And start reinvesting without flinching. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance