Dear Dr. Don,
My husband is 69, and I am 67. Ninety percent of our nest egg is in the stock market, which is presently doing much better on rate of return than any certificate of deposit or other option. Should we have such a large part of our retirement tied up in the market?

— Wendy Worries

Dear Wendy,
Stocks are having a great run in 2012. The major U.S. stock market indexes have reached highs they haven’t seen since 2007, before the financial crisis. The Standard & Poor’s 500 index is up almost 18 percent year to date (as of mid-September) and by a little more than 27 percent over the past 12 months. You’re not going to get that kind of yield in a CD.

While your nest egg may be heavily invested in stocks, you need to look at your overall financial picture before deciding you’re too much into stocks. Are you both receiving Social Security benefits, or are you eligible to receive those benefits once you file for them? Social Security retirement benefits are like an inflation-indexed annuity payment that you’ll receive over time. Do either of you receive a pension? The pension payments may not be inflation-indexed, but they also act as an annuity payment.

What I’m getting at is that you should consider how far your low-risk pension and Social Security benefits go toward filling your retirement needs and how much of a gap must be filled by your retirement nest egg. If the investment portfolio is largely for discretionary spending, you can take on more risk than if there’s a large income gap not met by your other income sources. Owning your home free and clear also provides a financial safety net with the option to take out a reverse mortgage.

All that aside, your portfolio is probably over-invested in the stock market. I’d suggest paying for a few hours of time for a fee-only financial planner to review your retirement income sources, your retirement income needs and how your portfolio should be invested to meet those needs over time.

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