Financial markets are so radically different now as compared to before the 2008 global financial crisis that advisors have to rethink their retirement assumptions.

Retirement experts said on Wednesday that many of the rules of thumb used to save and invest before and during retirement no longer work at a discussion during the FPA BE 2016 Conference in Baltimore.

For one thing, advisors should dispense with the assumption that a portfolio mostly allocated to bonds or evenly split between stocks and bonds will be sufficient to see their clients through a successful retirement, said Dave Yeske, managing director at Yeskie-Buie in Vienna, Va., during the Retirement Realities panel discussion.

“One of the ways we’re handling the low-rate environment is that we hold more equities in retirement portfolios than most studies typically assume,” Yeske said. “When a client moves into retirement, whatever their stock-bond allocation has been, we move it to 70-30, and we only move that much into bonds because our thought is that we want to only use bonds as a stable reserve.”

A 30 percent allocation to bonds, along with allocations to dividend-paying equities, can create a bridge that can see retirement portfolos through market downturns, Yeske said.

At Douglas C. Lane & Associates in New York, partner Marc Milic said clients are also presented with retirement portfolios with a higher-than-typical allocation to equities.

“We’ve probably kept clients at the higher end of equity allocations than they thought their stomachs could tolerate,” Milic said. “That’s not only in response to lower rates, but also because of longevity needs.”

The panelists also took aim at the financial industry’s typical method for calculating the risk level of a retirement portfolio—the risk tolerance questionnaire.

David Blanchett, head of retirement research for Morningstar in Chicago, opined that risk tolerance questionnaires weren’t really measuring whether an investor was willing to take on risk.

“There are a combination of factors that go into risk preference, but risk tolerance questinnaires usually concentrate on how someone feels if the market goes down by a certain level,” Blanchett said. “The reality is that you can document a client’s preferences and take on additional risks. It could end up being the right decision and be the complete opposite of what a risk tolerance questionnaire’s results tell you to do.”

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