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Greetings, Cmendezv, and welcome.

<<I retired several years ago from a company that has a 401k and a group that manages this fund. Due to a great loss of monies on a limited oil parnership several year prior I was not too keen on risking more on stocks so I placed my 401 in fixed income. Recently I place 45% in a balanced fund and the rest left in fixed income. QUESTION: at age 66 is that smart or should I do something else?>>

There are a number of reasons why this may not be the "best" choice, but the real question is it the "right" choice for you. At your age, you can expect to live another 18 to 25 years, perhaps even longer. Therefore, your biggest enemy will be inflation. Even at 4% per year, inflation will cause the buying power of your retirement stash to decline by half in less than 20 years. Your fixed income fund and balanced fund almost assuredly won't help out much in that regard. That means you should consider putting anywhere from 40% to 60% of your nest egg in the stock market to stay even in terms of purchasing power. But that entails risk.

History shows that stocks win out over the long term, say ten years and beyond. Yet, in the short term they can be very volatile, and could drop 20% in value literally overnight. True, in time they have always come back and gone on to even new highs. Can you tolerate and ride out a down period if it comes, or would you abandon ship and sell out at a loss? Only you can answer that. And if the answer is no, you can't abide a temporary loss like that, then perhaps the choice you have made is indeed the right one for you at this stage of your life.

Me, I opt for the majority of my portfolio in stocks at all times, even in retirement. But that's me, and you are you. So I guess you have to decide how well you can sleep at night with your investments, and then go from there.

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