Cederburg Shares Advice on Top Retirement Savings Strategy in Yahoo Finance

Scott Cederburg, associate professor of finance and Thomas R. Moses Endowed Professor in Finance in the Eller College of Management, was featured in a February 20 Yahoo Finance segment sharing his top savings strategy when it comes to investing retirement savings.

Cederburg shares that there is a way to reduce the risk of running out of money in retirement and sees a major return compared to other strategies.

According to Cederburg, investing all retirement savings in stocks and splitting them evenly between domestic and international markets can lead to the best outcome.

The study debunks the commonly known retirement investment portfolios, advocating for the 100 percent equity strategy with global diversification. Cederburg’s strategy outperforms traditional balanced and age-based strategies, yielding major returns and reducing the risk of running out of money in retirement.

"Global diversification is very important,” says Cederburg. “Our base case is thinking about 50 percent domestic stocks and 50 percent international stocks.” Cederburg also emphasizes that his research suggests diversifying across many foreign countries if investing internationally—not solely focusing on one.

Cederburg is an Associate Professor of Finance and the Thomas C. Moses Endowed Professor in Finance at the Eller College of Management. He earned his PhD in Finance from the University of Iowa. His research focuses on issues related to long-horizon investment outcomes and retirement security, return predictability, and mutual fund performance. His studies have been published in top academic journals, including the Journal of Finance, the Journal of Financial Economics, the Review of Financial Studies, the Journal of Financial and Quantitative Analysis, and the Review of Finance. He won the 2018 TIAA Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security for his study, "Tax Uncertainty and Retirement Savings Diversification," and his work has been covered by The Wall Street Journal, Bloomberg, The Economist, and Forbes, among other outlets.