As people live longer lives nowadays, more and more investors are still actively managing their assets even after the age of 90. For those seasoned veterans who have accumulated decades of investment experience, what are the key factors and priorities when it comes to investing at age 91? In this article, we will explore the optimal strategies focusing on asset allocation, risk management, estate planning and more. With proper planning, one can still pursue reasonable returns without compromising safety and liquidity in their sunset years.
Preserve capital and manage risks
At age 91, preserving capital and managing risks should be the number one priority. As the potential of living longer increases, so does the sequence of returns risk. It’s crucial to avoid large drawdowns in the portfolio that cannot be recovered. Investors should allocate a significant portion to low-risk assets such as cash, short-term bonds and annuities to ensure stable income. Although the expected returns may be lower, reducing volatility allows seniors to ride out market swings comfortably.
Maintain adequate liquidity
Liquidity needs also increase in advanced age to cover medical and personal expenses. 91-year-olds should hold enough cash and liquid assets to pay for unforeseen costs. This emergency bucket allows seniors to avoid selling assets at unfavorable prices. Additionally, low-risk income assets like bonds can supplement savings and provide regular cash flows.
Keep investment horizon short
With shorter expected lifetimes, 91-year-olds should keep their strategic investment horizon to 3-5 years. This reduces uncertainty and guards against having to sell during downturns. Equities can still play a role but should be high quality, large cap and low beta. Speculative assets like private equity, venture capital and derivatives should be avoided.
Monitor beneficiary planning
At such an advanced age, estate planning becomes very important. 91-year-olds should review their beneficiaries and ensure their wills and trusts are structured optimally for transferring assets. Taxes, probate costs and asset protection strategies need to be considered holistically to maximize the legacy left behind. Consulting experienced estate planning attorneys can help craft customized solutions.
Consider charitable goals
For 91-year-olds without heirs, charitable giving can be an impactful part of their legacy. Donor-advised funds, private foundations and other vehicles allow seniors to contribute to causes they care about in a tax-efficient manner. This can provide meaning and purpose for investors during their golden years.
In summary, 91-year-old investors should prioritize capital preservation, risk management and liquidity when structuring their portfolios. Maintaining a short strategic horizon, updating estate plans and exploring charitable giving are also key considerations. With the right comprehensive strategy, seniors can still prudently manage their assets while enjoying their retirement years.