{"id":2417,"date":"2026-06-29T08:33:30","date_gmt":"2026-06-29T08:33:30","guid":{"rendered":"https:\/\/charlotterelocationguide.com\/?p=2417"},"modified":"2026-06-29T08:33:30","modified_gmt":"2026-06-29T08:33:30","slug":"fidelity-reveals-serious-gap-in-retirement-portfolios","status":"publish","type":"post","link":"https:\/\/charlotterelocationguide.com\/?p=2417","title":{"rendered":"Fidelity reveals serious gap in retirement portfolios"},"content":{"rendered":"

For many Americans, decades of steady growth in a 401(k)<\/a> balance can reinforce confidence that retirement<\/a> planning is on track. <\/p>\n

Read more The fuel crisis just exposed a major problem with green aviation<\/a><\/p>\n

But a rising account balance does not necessarily mean a portfolio is positioned to generate reliable income for retirees.<\/p>\n

Fidelity’s first-quarter 2026 retirement analysis<\/a> indicates that many savers near retirement hold portfolios skewed toward growth rather than income generation. <\/p>\n

The data comes during a period of heightened market turbulence that has pressured retirement accounts, regardless of age group or account type.<\/p>\n

Half of Fidelity 401(k)<\/a> participants aged 70 and older hold more equities than the firm recommends, according to its first quarter 2026 retirement analysis. <\/p>\n

That rate is the highest of any age group and sits well above the 34% average across all 401(k) participants, the report confirmed.<\/p>\n

Among savers aged 65 to 69, close to four in 10 also carry stock allocations above the levels Fidelity considers appropriate, the analysis indicated. <\/p>\n

A 70-year-old retiree whose portfolio mirrors the Fidelity Freedom 2020 Fund would hold approximately 50% of total assets in equities, the firm noted. <\/p>\n

Carrying a significantly higher stock percentage means accepting more market risk than the fund’s design considers suitable for that particular retirement stage.<\/p>\n

Only 5.7% of participants adjusted their asset allocation during the first quarter of 2026, even as market volatility<\/a> shifted portfolio weightings, Fidelity stated<\/a>.<\/p>\n

The central danger of carrying a stock-heavy portfolio near retirement has a name that most savers never encounter until the damage is already done. <\/p>\n

Sequence-of-returns risk occurs when retirees withdraw from a declining portfolio in the early years after they stop working, permanently locking in losses, according to Fidelity’s research<\/a>. <\/p>\n

More Fidelity:<\/strong><\/p>\n

The research illustrates the risk with a scenario involving two hypothetical retirees who each start with $1 million and withdraw $50,000 every year. <\/p>\n

The retiree who encounters strong returns early and a bear market<\/a> later finishes with more than $3 million after 30 years of withdrawals.<\/p>\n

The retiree who faces negative returns first and then recovers sees the entire portfolio depleted by year 27, according to Fidelity’s data.<\/p>\n

Those forced withdrawals require selling shares at depressed prices, which permanently reduces the capital available to benefit from any eventual market rebound. <\/p>\n

This dynamic can permanently reduce how long a portfolio lasts, certified financial planner Mike Casey, founder and president of AE Advisors in Alexandria, Virginia, told CNBC<\/a>. <\/p>\n

Dobrila Vignjevic\/Getty Images<\/a><\/p>\n

One reason equity-heavy allocations persist into retirement is that many savers remain focused on portfolio growth without planning for sustainable income generation. <\/p>\n

Fidelity estimates<\/a> that retirees should aim to replace up to 80% of their pre-retirement income to maintain their current standard of living.<\/p>\n

Social Security<\/a> may replace only about 35% of pre-retirement income for a worker earning around $50,000, with the share shrinking at higher incomes, leaving personal savings to fill the gap, according to Fidelity. <\/p>\n

Read more Dutton Ranch\u2019s Kelly Reilly, Cole Hauser Break Silence on Showrunner Exit<\/a><\/p>\n

With traditional pensions continuing to vanish across the private sector, investment portfolios have become the primary source of supplemental retirement income for most Americans.<\/p>\n

Morningstar’s 2026 retirement income research<\/a> pegs the baseline safe withdrawal rate at 3.9%, slightly below the long-cited 4% guideline used by many financial planners. <\/p>\n

Portfolios with heavier equity concentrations generally support lower safe withdrawal rates because additional volatility amplifies sequence-of-returns exposure, the report indicated.<\/p>\n

Retirement finances<\/a> should be built on a three-part foundation balancing short-term reserves, guaranteed income sources, and growth-oriented investment accounts, according to Fidelity’s published framework<\/a>. <\/p>\n

Short-term savings cover immediate expenses, income from Social Security or annuities covers essentials, and investment portfolios fund discretionary spending and support long-term growth. <\/p>\n

The firm recommends withdrawing no more than 4% to 5% of total portfolio value in the first year of retirement, its analysis noted. <\/p>\n

Adjustments for inflation<\/a> in each subsequent year are part of the approach, which assumes a 30-year or longer retirement for someone who stops working at age 65.<\/p>\n

Financial Advisor Jared Chase highlighted a different dimension of the risk in an interview with Kiplinger<\/a>.<\/p>\n

A large retirement risk for many affluent households isn’t volatility, it’s becoming too conservative too early and failing to maintain purchasing power.<\/p>\n

That tension between protecting capital and maintaining growth potential is precisely what makes the final years before retirement so consequential for portfolio decisions. <\/p>\n

A retiree whose essential expenses are covered and who holds substantial liquid reserves may reasonably maintain a larger equity position, Mike Shamrell, vice president of thought leadership at Fidelity, explained to Kiplinger.<\/p>\n

For savers whose equity exposure has drifted above their target, Fidelity suggests rebalancing the portfolio back to the planned mix of stocks and bonds, Kiplinger<\/a> reported. <\/p>\n

Using the glide path of an age-appropriate target-date fund as a benchmark can help determine where stock and bond weightings belong, Shamrell recommended to Kiplinger.<\/p>\n

Holding one to two years of expenses in cash can reduce pressure to sell equities during a downturn, certified financial planner Matthew McKay, director of investments at Briaud Financial Advisors, told CNBC<\/a>. <\/p>\n

Charles Schwab<\/a> has recommended that retirees keep two to four years of expenses in liquid, short-term investments as a buffer against steep declines.<\/p>\n

“Don’t look at your portfolio as if the stock market never loses,” Jason Grover, a financial planning specialist at Grover Financial Services, told Kiplinger.<\/p>\n

Fidelity’s data leaves one question for every near-retiree: Does your portfolio deliver sustainable retirement income, or is it still structured for the accumulation phase?<\/p>\n

Related: Are Your Retirement Savings Safe? Inside Insurance Ratings & the Annuity Boom<\/a><\/strong><\/p>\n

The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.<\/i><\/p>\n

Read more Michael Burry made rare bullish bet on Big Tech stock Microsoft<\/a><\/p>\n

This story was originally published June 28, 2026 at 8:33 PM.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

For many Americans, decades of steady growth in a 401(k) balance can reinforce confidence that retirement planning is on track.<\/p>\n","protected":false},"author":1,"featured_media":2416,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-2417","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-read-todays-edition"],"yoast_head":"\nFidelity reveals serious gap in retirement portfolios - \u0421harlotte Relocation Guide<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/charlotterelocationguide.com\/?p=2417\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fidelity reveals serious gap in retirement portfolios - \u0421harlotte Relocation Guide\" \/>\n<meta property=\"og:description\" content=\"For many Americans, decades of steady growth in a 401(k) balance can reinforce confidence that retirement planning is on track.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/charlotterelocationguide.com\/?p=2417\" \/>\n<meta property=\"og:site_name\" content=\"\u0421harlotte Relocation Guide\" \/>\n<meta property=\"article:published_time\" content=\"2026-06-29T08:33:30+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/charlotterelocationguide.com\\\/?p=2417#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/charlotterelocationguide.com\\\/?p=2417\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/charlotterelocationguide.com\\\/#\\\/schema\\\/person\\\/8dbe691609d05fbc6dbaa5c440b54a93\"},\"headline\":\"Fidelity reveals serious gap in retirement portfolios\",\"datePublished\":\"2026-06-29T08:33:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/charlotterelocationguide.com\\\/?p=2417\"},\"wordCount\":947,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/charlotterelocationguide.com\\\/?p=2417#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/charlotterelocationguide.com\\\/wp-content\\\/uploads\\\/2026\\\/06\\\/c4355bd0311dea70eadd577d4df2abf6.jpg\",\"articleSection\":[\"Read today's Edition\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/charlotterelocationguide.com\\\/?p=2417#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/charlotterelocationguide.com\\\/?p=2417\",\"url\":\"https:\\\/\\\/charlotterelocationguide.com\\\/?p=2417\",\"name\":\"Fidelity reveals serious gap in retirement portfolios - 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