I agree with you here. I’m a financial planner and see this all the time in the industry. I’ve looked at the numbers a lot, and if you’ve got at least 20 years until retirement then you should have no less than 80% of your portfolio in stocks. Even during retirement you shouldn’t have less than 50% of your portfolio in stocks. Why? Inflation. If you have most of your money in bonds there’s a good chance you’ll run out of money because of your withdrawals and inflation.

My analysis all depends on you having saved 20-25 times the annual income you’ll need in your first year of retirement and assumes you increase your withdrawals by inflation every year. If you were to have a lot more than that saved up, then sure you could put it primarily in bonds. But as you noted, most people aren’t saving nearly enough as it is so they should have much more in stocks.

The key is education about how the market works and realizing how important it is not to panic. We also have to understand there is no easy way to make money in the stock market, and no one has the magic solution to making money on stocks every single day. If it sounds too good to be true…you know the rest.

I agree with you: If you’re about to use the cash, having debt investments (such as bonds) makes sense.

The point I’m trying to make, however, is that many financial advisors and/or writers recommend that people have a big portion of their portfolio in debt investments, simply because they’re not comfortable owning stocks (or stock funds).

To me, if the investor is years away from retirement, making such a recommendation is a disservice to the client/reader/investor.

Do you make less over time by buying bonds? It depends on the market at the time you are retiring