1 Easy Way to Stretch Your Money in Retirement

Retirement can be nerve-wracking. No matter how much you save and plan, there's no guarantee that your funds will be enough to get you through the following years and decades.

Want to make sure your retirement money lasts? Try this one simple strategy.

This 1 trick can help your retirement money last

There's a common belief that retirement investing should differ from pre-retirement investing. Mainly, portfolios tend to become more conservative, swapping stocks for bonds. This is still a wise move for many, especially if you can't afford to shoulder any short-term volatility and don't have the time (or income) to make back losses.

But I don't think conservative investing is right for everyone. If you're lucky, retirement can be a very long phase of life, often lasting several decades. Over the long term -- we're talking a decade or more -- stocks nearly always outperform fixed income instruments like corporate or government bonds. If you switch up your investment strategy too early, you may be leaving money on the table.

Let's look at a quick example. Say you're retiring at age 65 with around $600,000. Let's also say you need the money to last until age 90, that your annual spending is expected to be around $50,000, and that inflation averages around 3% per year. If you keep your portfolio invested in stocks and earn the annual long-term average of around 10%, you'd still have around $300,000 left in your portfolio at age 90. But if you switch your portfolio over to bonds, earning the long-term average of only 6% per year, you'd run out of money by age 80!

Staying aggressive with your investment strategy isn't right for everyone. But don't forget that retirement is a long game. Giving up on the stock market too early can greatly reduce your financial independence later in life. Want to stretch your retirement dollars? Stick with stocks for as long as it makes sense for you.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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