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Hey there, fellow retirement planners! If you’re approaching your golden years or already enjoying them, you’ve probably heard that old investing rule: “subtract your age from 100 to find your ideal stock percentage.” But is that still solid advice in 2025? As lifespans get longer and retirement stretches into decades rather than years, I’ve been wondering if we need to update our thinking.
The Traditional Rule: Is It Outdated?
For decades financial advisors have told retirees to follow the “100 minus your age” rule for stock allocation. By this traditional wisdom a 70-year-old should have only 30% of their portfolio in stocks and 70% in bonds, CDs, and cash.
But here’s the thing – many experts now believe this formula might be too conservative for today’s retirees. Let’s face it, we’re living longer than our grandparents did, which means our money needs to last longer too!
Many financial advisors now recommend new formulas like “110 minus your age” or even “125 minus your age,” according to the articles I’ve been reading. A 70-year-old person might try to keep 40 to 55 percent of their portfolio in stocks instead of just 30 percent, based on these newer guidelines.
What Real Retirees Are Actually Doing
Interestingly, many seniors are already ignoring the traditional advice. A Vanguard study mentioned in one article found that nearly one-quarter of investors aged 75 to 84 had almost 100% of their taxable brokerage accounts in stocks. Even among investors 85 and older, about one-fifth had similar stock-heavy portfolios.
According to data from Empower (a financial services company), investors in their 70s typically maintain:
- About 31-33% in U.S. stocks
- Another 5-7% in international stocks
- 11.39% in U.S. bonds
- 2.04% in international bonds
- 3.74% in alternative investments
In dollar terms, the average 70-something investor had approximately:
- $247,645 in U.S. stocks
- $39,774 in international stocks
Why More Stocks Might Make Sense for Today’s 70-Year-Olds
There are several compelling reasons why keeping more money in stocks makes sense for many of today’s 70-year-olds:
- Longer lifespans – With many retirees living into their 90s, your money needs to last 20+ years
- Inflation protection – Stocks historically offer better protection against inflation than bonds
- Income generation – Many stocks pay dividends that can provide regular income
- Tax considerations – Avoiding capital gains taxes by not selling appreciated stocks
- Low bond yields – In many recent periods, bonds haven’t offered attractive returns
As independent financial advisor Mick Heyman was quoted saying in one article, “The most important thing is income. Do you have enough based on your allocation and the potential volatility in stocks to finance your spending if you live as long as possible?”
The Risks of Being Too Conservative
One thing that most advisors won’t tell you right away is that investing too little can be just as risky as investing too much!
An overly conservative portfolio faces these dangers:
- May not keep pace with inflation
- Might not generate enough income for a 20-30 year retirement
- Could fall short during early market downturns
- May deplete faster than expected during periods of high inflation
One financial planner, Melody Townsend, pointed out that “Overly conservative portfolios early in retirement can struggle to keep up with inflation and reduce long-term financial flexibility.”
A Better Approach: The Bucket Strategy
Instead of making retirees stick to a simple formula based on their age, many financial advisors now suggest a “bucket strategy.” This method divides your investments into parts based on when you need the money.
Here’s how it might work:
Bucket 1 (Short-term needs – next 2-3 years):
- Cash, money market funds, short-term bonds
- Very conservative investments
- Covers immediate expenses regardless of market conditions
Bucket 2 (Intermediate needs – years 4-8):
- Core bond funds with longer maturities
- Moderate-risk investments
- Higher yields than Bucket 1
Bucket 3 (Long-term needs – 8+ years away):
- U.S. and international stock funds
- More aggressive investments
- Potential for higher growth
This strategy gives you peace of mind knowing your near-term expenses are covered, while still allowing your longer-term money to grow in stocks.
Factors That Should Influence Your Personal Stock Allocation
The perfect stock percentage for a 70-year-old isn’t one-size-fits-all. Your ideal allocation should consider:
- Health and life expectancy – Better health might justify more stocks
- Other income sources – Strong pension or Social Security benefits might allow more risk-taking
- Total portfolio size – Larger portfolios can sometimes support more aggressive allocations
- Monthly expenses – Lower expenses relative to portfolio size may allow more risk
- Debt load – Less debt generally means more flexibility
- Desired legacy – Plans to leave money to heirs might justify more growth-oriented investments
- Risk tolerance – Your emotional ability to handle market volatility
I’ve seen too many retirees make decisions based solely on age rather than their unique situations. Don’t fall into that trap!
Rebalancing: The Key to Managing Risk
No matter what allocation you pick, don’t just set it and forget it! Regularly rebalancing your portfolio is important for managing risk in retirement.
As one certified financial planner quoted in an article said, “Rebalancing is important for everyone, but it becomes even more important in retirement.” The reason? It forces you to “buy low and sell high” by trimming overperforming assets and adding to underperforming ones.
For example, if your target is 40% stocks but after a bull market you’re sitting at 50% stocks, rebalancing would involve selling some stock investments and buying bonds to get back to your target allocation.
Beyond Asset Allocation: Other Risk Management Tools
While getting your stock-to-bond ratio right is important, it’s only one part of protecting your retirement nest egg. Consider these additional strategies:
1. Diversification
Don’t just divide between stocks and bonds – diversify within each category:
- Different stock sectors (tech, healthcare, consumer, etc.)
- Various bond types (government, corporate, municipal)
- Geographic diversity (U.S., international developed, emerging markets)
2. Tax Planning
Proactive tax planning can be just as important as investment selection. Work with your tax professional throughout the year, not just at tax time. Consider strategies like:
- Partial Roth conversions during lower-income years
- Tax-loss harvesting
- Strategic withdrawal sequencing
3. Automating Withdrawals
One of the biggest retirement mistakes is panicking and selling investments during market downturns. Setting up automated withdrawals can help remove emotion from the equation.
A Real-World Example
Let me share a scenario that might help illustrate these concepts:
Imagine a 70-year-old couple with $1 million in retirement savings, $40,000 in annual Social Security benefits, and $50,000 in yearly expenses.
Using the traditional “100 minus age” rule, they’d have just 30% ($300,000) in stocks and 70% ($700,000) in bonds and cash.
But with a life expectancy of 85-90, their money needs to last 15-20 years. Using the “110 minus age” rule, they might instead allocate 40% ($400,000) to stocks, potentially generating better long-term returns while still maintaining security.
With the bucket strategy, they might allocate:
- $100,000 (2 years of expenses) in cash and short-term investments
- $200,000 (4 years of expenses) in intermediate-term bonds
- $700,000 in diversified stock investments for long-term growth
This approach provides both immediate security and long-term growth potential.
My Personal Take
I’m not a certified financial advisor, but from all my research, the evidence seems clear that most 70-year-olds should probably have more in stocks than the traditional wisdom suggested. The old 30% stock allocation (from the 100-minus-age rule) just seems too conservative for today’s longer retirements.
For most healthy 70-year-olds, I’d say 40-50% in stocks makes more sense – aligning with the “110 minus your age” or even “120 minus your age” formulas. But again, your personal situation might call for more or less risk exposure.
The Bottom Line
The question of how much a 70-year-old should have in stocks doesn’t have a one-size-fits-all answer. While traditional wisdom suggested around 30%, modern longevity and economic realities might push that number closer to 40-50% for many retirees.
Rather than blindly following any formula, consider your unique situation:
- How long will your retirement likely last?
- What other income sources do you have?
- How much risk can you tolerate emotionally?
- What are your goals for your money?
And remember – working with a qualified financial advisor who understands your specific needs is probably the best way to determine your ideal allocation.
What’s your take on retirement investing? Are you following the traditional rules, or have you adjusted them for today’s realities? I’d love to hear your thoughts in the comments!
Disclaimer: This article contains general investment information and should not be considered personalized investment advice. Everyone’s situation is different, and I strongly recommend consulting with a qualified financial advisor before making significant changes to your retirement portfolio.
Asset allocation in retirement
Investors have typically invested their retirement portfolios in assets based on the amount of time they have remaining before they plan to retire. An investor with decades left to work before retirement will typically have a higher allocation of stocks in their portfolio because stocks offer higher returns and they have plenty of time to recover from short-term volatility.
As one gets closer to retirement, the portfolio allocation shifts toward safer investments such as bonds or other fixed-income securities because you’re closer to the time when you’ll need the money for various living expenses. You sacrifice the returns offered by stocks for the safety offered by bonds. But the exact percentage of stocks or bonds to hold can be tough to nail down.
Traditionally, a simple formula of 100 minus your age was often used to roughly determine the amount your portfolio should have allocated to stocks. For example, if you were 70 years old, you’d have about 30 percent allocated to stocks.
“That formula is generally a good place to start,” says Keith Beverly, chief investment officer at wealth management firm Re-Envision Wealth. Beverly says the exact number will depend on a number of things, such as the person’s risk tolerance, the state of the economy, and the stocks held in the portfolio.
Investors aged 65 and older had an average of 49 percent of their portfolios allocated to stocks at the end of 2023, according to a Vanguard report on retirement plans it oversees.
Many investors have essentially outsourced the asset allocation decision by electing to use target-date funds in their portfolios. These funds are managed with a specific retirement date in mind. As the date gets closer, the assets are slowly moved toward safer investments like bonds.
But target-date funds can have higher stock allocations than you might expect. As of April 30, 2025, about 51% of the Vanguard Target Retirement 2025 Fund’s assets are in stocks. This is a lot more than the “100 minus age” formula suggests. The Vanguard Target Retirement 2035 Fund (VTTHX) has about 68 percent of its assets in stocks.
Lazetta Rainey Braxton, co-CEO at financial planning and wealth management firm 2050 Wealth Partners, says today’s retirees may need to hold more stocks than previous generations in order to ensure their portfolios last for the long term.
“I understand that retirees may be a little hesitant about risk — the question is how much can they afford to take, knowing that they’re going to need the growth,” Braxton said.
A 70-year-old investor who holds 30 percent in stocks and 70 percent in fixed income may struggle to meet their spending needs if they live into their 90s, Braxton says. “Is the (fixed) income portfolio generating enough money to carry another two decades? The answer is typically ‘no.’”
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The stock market has been on a tear for much of the past decade, with annualized returns of more than 12 percent for the S&P 500 as of May 2025. Over the same time, interest rates have mostly hovered near record lows, which may have caused stock allocations to increase in retirees’ portfolios as investors chased higher returns in the stock market.
So how much should you have invested in stocks once you’re retired? Here’s how to think about asset allocation during retirement and the risks of having too much allocated to equities. Invest Rate Icon
Need expert guidance when it comes to managing your investments or planning for retirement? Bankrate’s AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals.
How Should You Invest in Your 70s?
FAQ
Should a 70 year old get out of the stock market?
Many retirees adopt a conservative investment strategy to help ensure they have enough income to support themselves. The “100 minus age” rule, a popular guideline, suggests subtracting your age from 100 to determine what percentage of your portfolio should be invested in stocks.
How much should a 75 year old have in stocks?
At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).
How much money does the average 70 year old have saved?
| Age | Average retirement balance | Median retirement balance |
|---|---|---|
| 50s | $970,570 | $441,611 |
| 60s | $1,148,441 | $539,068 |
| 70s | $994,140 | $432,043 |
| 80s | $787,424 | $326,960 |
How much should retirees have invested in the stock market?
There is no single answer to how much retirees should have in stocks, as it depends on individual circumstances, but a common guideline is a decreasing “glide path” where the stock allocation gradually goes down with age.
How much stock should a 70 year old have?
At age 70 to 79, consider a moderately conservative portfolio with 40% in stocks. At age 80 and above, be conservative and limit your stock holdings to 20%. How much stock is too much in retirement?.
How much money should a 75 year old have in stocks?
But now that Americans are living longer, that formula has changed to 110 or 120 minus your age — meaning that if you’re 75, you should have 35% to 45% of your portfolio in stocks. If your portfolio is worth $100,000, this formula says you should have at least $35,000 in stocks and no more than $45,000.
How much should a 70-year-old invest in stocks?
Traditionally, a simple formula of “100 minus your age” was used to estimate the percentage of your portfolio that should be allocated to stocks. For instance, a 70-year-old individual would have approximately 30% of their portfolio invested in stocks. However, this formula is merely a starting point, and other factors need to be considered.
How much should a 65-year-old retiree invest in stocks?
That means that a 65-year-old retiree shouldn’t have more than 15% of their retirement savings in stocks. The rest of their money should be in safer investments like bonds, money market funds, and cash.
How much of your portfolio should you keep in stocks?
For example, if you’re 30, you should keep 70% of your portfolio in stocks. If you’re 70, you should keep 30% of your portfolio in stocks. That being said, many financial planners now say that the rule should be closer to 110 or 120 minus your age because Americans are living longer.
What is a good age to invest in a 401(k)?
At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).