Use A Sideways Pyramid To Increase Your Savings

The bum economy has been torture on retirement savings, and even folks who thought they'd saved well for retirement are considering going back to work rather than withdrawing funds in a down market. Finance web site Kiplinger suggests an alternative.

Photo by *Mickey.

The article suggests taking the classic investment risk pyramid (which places the safest investments at the bottom and more risky investments higher up) and turning it sideways.

In the classic model, even if your investments are diversified, all your assets are at risk at the same time. [Jim Coleman, head of Coleman Financial Advisory Group]flipped the pyramid on its side so that you tap the most conservative, risk-free investments at the beginning of your retirement timeline and let the riskier investments grow until the later years. Your most aggressive assets will have years — and possibly even decades — to grow, creating a source of stable retirement income in the future. "With this divide-and-conquer strategy, you can have the best of both worlds," says Coleman.

Browse the post for more details, then let's hear how your investment strategies have changed since the economic downturn in the comments.

Increase Your Retirement Income [Kiplinger]


    Whilst that sounds innovative, I'm not sure its mathmatically all that wise. Consider the Average "risk" of all your investments that you have, by drawing on only the conservative low risk assets you change the risk profile of the entire portfolio. You could start with an average moderate risk profile and in a year have a highly risky investment portfolio. Depending on your risk profile is a little like killing off the best in the heard leaving the weak old crippled and mutant and hoping they all do well

    True but if your not that Savy it's simple way of balancing the risk and the simple graph is easy to understand and monitor

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