Robert Brokamp

The title of the article is Exploring the Retirement Risk Zone, which is a time period several years before and several years after retirement when a bear market can significantly change your retirement plans.

For the article, they analyzed how annual portfolio returns for the 20 years before and the 20 years after retirement are correlated with retirement spending outcomes.

The result?

Quote, End of quote.

The takeaway is that once you're within a decade of retirement, it might be time to start playing it safer with a portion of your portfolio, especially if you've already saved enough to meet your goals.

What does that mean from an asset allocation perspective?

The article didn't say, but I recently calculated the average allocations of the target date funds offered by the five biggest providers, American Funds, BlackRock, Fidelity, T. Rowe Price, and Vanguard.

For the 2030 funds, the average allocation was 50% stocks, 43% cash and bonds.

And for the 2035 funds, it was 67% stocks, 33% cash and bonds.

Keep in mind that target date funds are meant for investors with a moderate risk tolerance, which might be too tame for many Motley Fool podcast listeners.

But for those in the retirement risk zone, it might make sense to dial back your appetite for risk just a bit so that you can still retire when and how you want.

And speaking of bonds, let's get to the number of the week, which is 4.32%.

That's the yield on the 10-year treasury as of Thursday morning, up from 3.97% on February 27th, the day before the start of the war in Iran.

Now, this might be surprising.

Geopolitical events often cause a flight to safety, with investors rushing into treasuries and causing yields to drop.

Why not this time?

Well, it could be because inflation, which was already creeping up, will be driven even higher due to skyrocketing oil prices.

Inflation is one of the biggest nemeses to bond investors, so perhaps they're now requiring a higher yield to compensate for the greater risk.

And we may not get as much relief from the Federal Reserve as experts were expecting earlier in the year.

On Wednesday of this week, the Fed concluded its latest meeting and kept rates where they are.