The typical financial advisors prescription, embedded in the Age Rule and in Target Date Funds, implies that investors should tilt their portfolios towards risky assets when young and reduce the risk exposure as they age. These widespread simple investment rules have been developed abstracting from the risk of long-term unemployment (LTUR). Absent LTUR, welfare losses due to the use of simple Age Rules for stock investing are below of 1% in standard calibrations (Cocco, Gomesand Maenhout, 2005; Love, 2013). They grow above 3% in Target Date Funds.. This project studies the performance of the simple investment rules with respect to optimal investment rules that account for long term unemployment risks
