A Wharton School professor emeritus says women may be wise to ignore advisors who tell them to cope with long lifespans by loading up on stocks and stock funds.
David Babbel, who was a fellow at the Wharton Financial Institutions Center at the University of Pennsylvania and a founder of the pension and insurance department at Goldman Sachs Group Inc., New York, comes to that conclusion in a paper released by the center.
Babbel received some of the funding for his work from New York Life Insurance Company, New York.
Conventional wisdom suggests that women should protect against the risk of outliving their retirement savings by accepting a higher level of investment risk in exchange for higher anticipated returns, Babbel writes in the paper.
One problem with keeping retirement savings in ordinary stock, bond or mutual fund arrangements is that “the temptation is always there for you or your spendthrift spouse to spend extra, or to get hit up by a grandchild that needs a new boat, or sought by others that know that your money is sitting there and available,” Babbel writes.