A sure way for a conservative central banker to grab a headline is by urging "a lot more" risk-taking if you want a decent retirement.

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Especially when he's about to pull the trigger on another rate cut. Even I'm impressed.

To be exact, Reserve Bank governor Glenn Stevens specified "those on the brink of leaving the workforce" need the extra risk for "the expected flow of future income they want" and  "it's important people realise how much risk is being taken (in the financial space) and are appraised of it".

Or maybe he's really saying don't be so greedy.

The old rule of thumb that you need $1 million at 65 for a comfortable retirement no longer holds because it was based on returns of 8 to 10 per cent and we're living longer. Sorry, but being a millionaire doesn't cut it anymore, not that I'm saying that was ever in prospect.

You can see the huge difference lower returns make in just five years from a comparison by Martin Currie Australia and subsequently quoted by fund manager Legg Mason from a $500,000 lump sum. The annual income from an annuity or term deposit shrank from $30,000 to $13,000.

But get this. Invested in the sharemarket, a beneficiary of falling rates, your retirement income would have risen from $37,000 to $44,000, counting the 30 per cent tax credit from franking.

Which brings me to Stevens' other point about taking more risk, probably without realising it. A good part of the returns of the average super fund is coming from rising bank shares and their dividends.

Three big banks are about to report their results for the half year to March. Ho hum,  more record profits. But look at why: it's the boom in housing where they're lending proportionately more, coupled with rock-bottom bad debts.

While neither is under immediate threat, especially while rates are being cut, they're not sustainable either.

Even if, fingers crossed, we avoid a recession, the banks will have to face higher capital ratios which ties up money earning next to nothing – call it poetic justice  considering what they're paying on term deposits – that could more profitably be lent out.

But my worry is how high their shares have already gone. Talk about a correction waiting to happen.

Over 20 years CBA has returned 21.6 per cent a year, yet the biggest bull run ever on Wall Street which was in the last two decades of the last century, managed only 17.6 per cent, as fund manager Kerr Neilson, founder of Platinum told a recent Morningstar seminar. I mean, is CBA that good?

Frankly, the sharemarket is risky enough without plopping everything into banks priced to perfection to chase their generous dividends.

But since risk is unavoidable the trick is to diversify into other stocks – even assets such as international equities – so it isn't concentrated.

Remember low-dividend paying stocks are likely to be the ones that grow because they're re-investing in the business rather than paying out dividends.

@moneypotts