Know Your Risk, Know Yourself

Know Your Risk, Know Yourself

More Americans are reaching traditional retirement age right now than at any other point in history. According to the Alliance for Lifetime Income, roughly 4.1 million people will turn 65 this year, part of what demographers have called the Peak 65 generation. For many, this is a time when accumulation slows, and the focus shifts to living off what a lifetime of work has built. This shift is perhaps the most important transition in their lifetime and may require adjustments to their portfolio's risk profile.

When Your Portfolio No Longer Fits

☑️ Reality check: The asset allocation that was part of your overall retirement accumulation strategy may not fit when you start to draw income from those assets. Many new factors need to be considered, including when a person plans to start drawing Social Security benefits.

☑️ Between the lines: Before retirement, creating a strategy is the type of conversation worth having. For example, it's best to have a strategy in place for when required minimum distributions begin, long before you take your first dollar.

What Changes, and Why It Matters

☑️ Smart move: Revisiting your asset allocation is about helping your long-term approach work with the life you're living now.

☑️ Between the lines: Risk tolerance that felt right at one asset level may not fit your transition to the next. Picture a coin flip for $100 versus a sure $50. Now picture that same flip for $100,000 versus a sure $50,000. The odds never change, but the pull toward the "sure thing" might.

💭 Thought Of The Month

📚 Suggested Resources

Understanding how you respond to risk instinctively is a useful starting point for any conversation about investing. 

📖 Additional Resources

• Investor.gov | Assessing Your Risk Tolerance
• Financial Industry Regulatory Authority | Know Your Risk Tolerance
• Financial Industry Regulatory Authority | Asset Allocation and Diversification

✏️ Worth Noting 

📊 Historical Perspective: The S&P 500 returned 25 percent in 2024 and 18 percent in 2025, according to Goldman Sachs. Extended periods of strong market performance have a way of pulling risk tolerance assessments out of date. A portfolio that felt well-calibrated during a prolonged rally may reflect a different appetite for risk than someone actually holds today.

Behavioral Reminder: A 2026 MarketWise survey of more than 1,000 American investors found that 76 percent expressed concern about a potential market downturn, yet nearly half said they felt unprepared for one. Awareness of risk and a strategy thoughtfully built around it are two different things.

💡 Food for Thought: Risk tolerance is not a fixed trait. A 2025 study published in the journal Risk Management found that more than half of the surveyed investors showed a meaningful gap between their stated comfort with risk and their actual financial behavior, with most underestimating the risk they were actually carrying. The gap tends to close when risk tolerance is revisited regularly alongside someone who knows the full picture.

👉 Final Thoughts

A strategy built carefully a few years ago may still be well-suited to where you're headed. Or the changes in your life and the passage of time may have opened up room for a fresh look. Either way, knowing where things stand is worthwhile. That's the kind of conversation we're here for. If anything in your situation has shifted recently, or if it's simply been a while since we've reviewed how things are positioned, please don't hesitate to reach out.