Retirees with heavy stock exposure face significant risk, as the S&P 500 dropped almost 40% in 2008. The rule of 100 suggests subtracting your age from 100 to determine stock allocation. Conservative portfolios heavy in bonds or CDs may fail to outpace inflation. Three questions are prompting Americans to realize they can retire earlier than expected. It’s crucial to assess risk before retiring and diversify your portfolio with assets like bonds and cash. Avoid sequence of returns risk, as market downturns can impact savings significantly. Your 401(k) may fluctuate too often, leading to concerns about its performance. If you constantly worry about your 401(k), it may be too aggressive and lack diversification. A well-crafted asset allocation strategy is crucial to balance risk. A conservative 401(k) may not provide sufficient growth to meet retirement goals. If your 401(k) lacks diversification, you may be too exposed to assets that don’t outpace inflation. Start by speaking with your advisor to diversify your portfolio effectively. The rule of 100 can help gauge how much to invest in stock and bond funds based on your age. Retirement isn’t just about picking the best investments, but also about accumulating vs distributing. Many Americans are reworking their portfolios and discovering they can retire earlier than expected. Take 5 minutes to learn more if you’re considering retirement.

Read more at Yahoo Finance: The 401(k) Blunder That Could Torpedo Your Retirement