The only way to know if you re on track toward a comfortable retirement is to estimate your retirement expenses. After you ve projected expenses, you can then calculate how much you need to save. Retirement software and web-based calculators will help you in the process. However your portfolio is divided up between stocks and bonds will depend on your tolerance for risk and when you plan to retire. The allocation can be increased or decreased depending on your comfort level.
Stocks are for long-term growth.
Over a long period of time, stocks have a good track record for increasing your retirement savings. According to most financial planners, stocks are more likely to help your savings beat the rate of inflation. Bonds aren t always the way to go when you retire. Many people that have retired move a lot of their portfolio into bonds. Over a period of 10 years, inflation can eat away the purchasing power of bonds interest payments by more than a third.