By Tom Bradley

100 minus your age. That’s the old rule of thumb for determining how much you should have invested in stocks. If you’re 70, then 30% of your portfolio should be in stocks.

I say the ‘old’ rule because we have to question how applicable it is today with interest rates hovering around zero. In years past, retirees could retreat to bonds knowing they were getting a positive return after inflation. Real returns were 2-6%, depending on the year (real return = actual return – inflation). Today, the projected real return for GICs and bonds is either side of zero.

It’s a tough time for the newly retireds. They don’t want the volatility that comes with owning stocks, but need to generate an income and protect themselves against inflation for 30+ years.

Our advice is always specific to the situation, but in general, we don’t like to see our clients who are 70 or under going below 50% stocks.

I read somewhere that the baby boomers don’t feel anywhere near their age. 70 is the new 50. I guess the ‘new’ rule should be: 100 minus how you feel.