I’m retired and have about 40% of my nest egg in stocks and 60% in bonds. I’m wary of the stock market, so I’m considering moving part of my savings into an annuity. Do you think that’s a good idea? –A.G.
It depends on what your goal is. If you’re primarily interested in making sure the value of your nest egg doesn’t get hammered if the recent rally in stock prices gives way to a sharp selloff — a reasonable concern given the age of this bull market and all the uncertainty surrounding a new administration coming into the White House — then I’d say there are easier ways to deal with that issue. You can simply sell off some of your stock holdings and use the proceeds to build up your position in bonds or bulk up your cash reserves or do both.