Baby Boomers may have too much of their savings invested in stocks
By Staff Writer
Members of the Baby Boomer generation may have too much of their retirement savings being invested heavily in stocks.
This is the conclusion Fidelity Investments reached after studying the most recent data available.
Fidelity Investments, which is the leading administrator within the United States of retirement plans indicated that many members of the Baby Boomer generation are currently in way more than they need to be when it comes to their investments.
According to Fidelity, many Baby Boomers are ignoring the recommended percentage of their savings being invested into stocks.
According to Main Street, one general rule people can follow when it comes to determining what percentage of an individual's savings should be invested into stocks is to take their age and subtract it from 120. This is the piece of advice many Baby Boomers are currently ignoring.
Fidelity outlined their data even further, indicating that right now, not only are many Baby Boomers investing too much into stocks, but some are even risking all of their money.
Fidelity reported that 11 percent of people aged 50 to 54 currently have all of their 401(k) assets currently invested into stocks. The administrator also shared that an additional 10 percent people aged 55 to 59 have taken the very same risk, according to Reuters.
Investing so heavily in stocks is said to be primarily dangerous because of all the risk that is involved in doing so. According to Jim MacDonald, President of workplace investing at Fidelity Investments, the main issue here is that so many people right now are taking too great a risk with the money they have earned through the years. On top of all that, the risk they are taking is wholly unnecessary, and many Baby Boomers could be better served by taking an approach laced with less risk.
Fidelity has also suggested that some of the disproportionate investments may be due at least in some part to people not paying attention. According to the administrator, about a quarter of Baby Boomers aren't even checking once a year to see if they are taking the recommended actions when it comes to their savings.
Baby Boomers may need to also take action sooner rather than later as the markets may be due to regress sometime in the near future, according to CNN Money.
While some Baby Boomers may be happy trying to get the most out of their money with the markets riding high, Fidelity has suggested that the best course of action is to always take the recommended path.