Retirement Preparation Guidebook

Should you have 100% invested in equities to maximize spending since they have historically provided the highest total returns? Probably not. As equity returns are not guaranteed, owning exclusively equities can be risky if the market drops. (This is labeled "sequence of returns" risk which is especially harmful early in retirement). Income from an equity portfolio may be insufficient to pay for essential living expenses which mean that stocks may have to be liquidated in a bear market which could shrink the portfolio and force spending cutbacks.