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>> Everyone has to decide how much risk they can tolerate. But that is a personal decision. Most people we are told are too conservative in the investments they choose for their 401K plans. For those who contribute, it is the most common error. <<

There certainly is truth to the old saying that "sometimes the biggest risk is in not taking enough risk."

Though I personally have about 30% in fixed income and cash despite being only 41 and being probably 10-12 years from full retirement. I did well enough investing my 401Ks and IRAs -- and funding them heavily even in my 20s -- that I can afford to reduce the risk somewhat and still meet my goals. If that means 7-8% instead of 9-10%, so be it. I'm to the point where I'm no longer trying to maximize my retirement savings; I'm now trying to minimize the chances of not meeting my target and in a position to invest slightly more defensively.

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