1.7 [Related to the Apply the Concept: “Does Your Portfolio Have Enough Risk?”] Many people save for retirement through a 401(k) plan. An article in the Wall
Street Journal on saving for retirement observes that “younger investors should . . . devote 90% or even 100% of their retirement portfolios to stocks.” The
article notes that “putting 60% into stocks and 40% into bonds . . . is often recommended for people in or near retirement.”
- What is a 401(k) plan? What does the article mean by a “retirement portfolio”?
- Why should the assets someone purchases while saving for retirement depend on the person’s age?