JLC,You wrote,People never have the risk tolerance they think they have. I good test or thought experiment, go to a casino and gamble with more money than you can afford to lose. Say 3 to 6 months of paychecks/living expenses. Make you break out in a cold sweat just thinking about it? What do you think can happen in the stock market? You'd hate to be a year away from retirement, or two or three, and have 2008 happen all over again. Agreed. However for a person in their mid-40s, a 2008-like event shouldn't be 3-6 month's worth of living expenses. Honestly it should be a loss of more like 2 YEARS worth of living expenses if they were fully invested in say the S&P 500.Now when you first read that, you may react and say something like, But I only have 6 months worth of living expenses! How am I supposed to get to years worth of living expenses if I don't take some risks?Well it's true you should be taking some risks. But while taking risk might be necessary to earn a "real rate of return" over the long haul, taking a lot of risk can be a good way to guarantee losses.Instead what's usually missing from the retirement plans of individuals like juststartinout isn't an investment strategy. Its a "saving strategy". If juststartinout had one in place for the past decade or more, I guarantee he'd have more than $30,000 in a rollover IRA. People must save to retire. Too few do. - Joel
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