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Read other letters about this article
I'm not sure whether anybody mentioned this, but...
With a long time before retirement, investing mostly in overly conservative instruments like CDs is basically stupid, even with the potential of major market collapses.
For instance, imagine that this woman's husband put $1000 per year in CDs that earn 3% a year. And the wife does the same thing but in stocks that average 9% a year.
At the end of 10 years, he has a little over $13,000 and she has almost $19,000. Let's say the market then collapses and her savings fall nearly in half to $10,000.
So she's really not far behind her husband. She's basically lost all her earnings from the last 10 years but has kept her principal. The market slowly recovers and starts earning 9% again and they continue to do what they've done until retirement, another 10 years.
At retirement, he has less than $30,000 and she has over $40,000.
So who was smarter?
Now if they were less than 10 years from retirement, the husbands strategy might make sense. But at their age any financial consultant would tell her that her husband is an idiot.
