Phil Cannella – Phillip Cannella Blog: Phil Cannella goes against the grain once again by telling us that the Rule of 100 is not always the most sensible approach to someone’s retirement accounts. You see Phil Cannella isn’t looking for a cookie-cutter approach to someone’s retirement accounts, he is looking at treating each person as an individual and assessing each person’s individual needs against their overall assets.
If you are not familiar with the rule of 100, simply put it works like this: Take the number 100 and subtract your current age and that equals the percent of recommended risk for your portfolio. According to the rule, at 80 years old you should have no more than 20% of your money in risk accounts.
Phil Cannella doesn’t think this is the best approach for all retirees. To quote Phil Cannella, “So, say you’re in your 80s, and you follow this rule and put about 80% of your money into “safe” accounts while the other 20% remains in aggressive risk investments. If the market crashes, a large portion of that 20% could go away – you could even lose the whole 20%. But that’s okay because you’ll still have 80% of your assets left. Does this sound sensible to you? It doesn’t sound particularly reasonable to me. Why be relieved at losing 20% of your nest egg? You’re going to need that money in your retired years. And I can show you how to keep 100% of it.”
This is the exact point Phil Cannella wants to get across. He has developed a system that can crash proof your investment accounts, which will protect them from all risk and keep your principal in tact.