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ILLUSTRATIVE EXAMPLE

Are our investments taking too much risk?

Connect investment risk to the goal the portfolio is meant to fund. The accounts, amounts, and answer below are fictional.

LSAMPLE ANSWERILLUSTRATIVE
THE SHORT ANSWER

Probably. At 88% stocks, a major downturn near retirement could delay the plan even though your savings rate is healthy. Moving toward 75% stocks over the next three years keeps the age-60 target while reducing the size of a likely drawdown.

KEY NUMBERS
Stocks now88%
Three-year target75%
Years to retirement16
WHAT MATTERS
  • Several funds hold the same large companies, so the portfolio is less diversified than the account count suggests.
  • New contributions can do most of the rebalancing without selling taxable holdings.
  • The goal does not require taking the maximum possible risk.
POSSIBLE NEXT STEPS
  • Direct new workplace-plan contributions toward bonds and broad international funds.
  • Review overlapping holdings before adding another fund.
  • Stress-test the age-60 plan against a 25% stock-market decline every year.
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