Risky business

You need to invest more aggressively, or inflation will eat away your retirement savings.

Don't outlive your retirement nest egg by investing too conservatively.

Even retirees need to keep a sizable portion of their savings in equities.


Ah, the pearls of wisdom imparted by investment gurus of the past! Well, now that the stock market has tanked, many pre-retirees and retirees are bemoaning the perils of risking some or all of their savings in aggressive investments.

Even those who followed the mantra of "diversify, diversify, diversify" have seen their retirement savings evaporate. Yes, all their eggs were not in one basket, but the recent financial earthquake knocked all their baskets off the shelves.

It's time to re-examine the concept of risk. While the risk of inflation is real, the risk of losing principal is also real. Just what exactly are we protecting if we invest to beat inflation, but end up losing our principal too?

So at the risk (!) of being lambasted by some of those investment gurus, we will restate our long-standing belief:

• Protect your retirement savings at all costs. Once you reach your nest egg goal--whatever that number is--put it aside and lock it into the most conservative investments possible. Yes, money market funds are paying piddling amounts, Treasury bills carry minuscule interest rates, savings bonds have never been sexy, and CDs are pretty boring....but they don't lose their value (at least so far).

• Play it safe, but don't ignore investment fees. Savings bonds and CDs don't pay much, but they usually don't eat up your money with management fees either.