How Much of Your Retirement Money Should Be in Stocks After 70?
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Retirement often comes with the relief of leaving behind decades of work, but it also brings its financial puzzles. One of the biggest questions for people in their 70s is whether they should still keep money in the stock market, and if so, how much. The balance between protecting your savings and keeping them growing is not as simple as it once seemed.
For years, the “100 minus age” rule guided retirees. A 70-year-old, for example, would keep 30% of their portfolio in stocks and the rest in safer investments like bonds and savings accounts. But with longer life expectancies and rising costs, many experts now suggest a more growth-oriented formula: the “120 minus age” rule. That means a 70-year-old can keep as much as 50% in stocks, giving their savings a chance to outpace inflation.
Why Asset Allocation Still Matters at Above Age 70
No two retirees are alike. Some have generous pensions or large savings accounts, while others rely heavily on what they have set aside in investment portfolios. Your personal goals, income needs and comfort with risks should drive how much risk you take on.
Younger investors can afford to ride out market downturns, which is why their portfolios usually lean heavily toward stocks. But in retirement, stability matters more. That is why many people prioritize safe havens like certificates of deposit, money market funds and government bonds. The right balance depends on whether you need a steady income today or want to preserve growth for the years ahead.
Understanding the 120-Age Rule
The 120-age rule works as a starting point. Subtract your age from 120, and that number becomes the percentage of your money that can be invested in stocks. At 70, that means 50% stocks and 50% safer investments.
The idea is that while you still want income stability, you also cannot afford to ignore inflation. A portfolio made entirely of bonds and savings accounts may lose purchasing power over time, especially with healthcare costs and living expenses rising. Having half in stocks allows for growth, while the other half cushions against volatility.
Adjusting for Portfolio Size & Lifestyle
The size of your retirement savings makes a big difference. If you have built large savings, you may feel comfortable putting a significant portion in bonds or even holding cash, since you will not rely on high returns to cover daily expenses. But if your savings are more modest and closely tied to your spending needs, you may need the long-term growth potential of stocks to sustain your lifestyle.
It also matters how comfortable you are with the stock market. Lifelong investors often feel more at ease keeping a higher percentage in equities, while those new to investing may prefer the reassurance of conservative options.
Rebalancing as Conditions Change
Markets rise and fall, and so do personal circumstances. What works at 70 may need tweaking at 75 or 80. Regularly reviewing and rebalancing your portfolio helps ensure your allocation continues to match your risk tolerance and financial needs.
For instance, if a strong stock rally leaves you overweight in equities, trimming back can protect you from potential downturns. Similarly, if you find yourself relying more on a steady income, shifting toward bonds or annuities may be a better fit.
Finding the Right Balance
The truth is, there is no magic number that applies to everyone. The 120-age rule is useful as a guideline, but not a prescription. Some retirees thrive with 40% in stocks, while others may hold closer to 60%, depending on their comfort and financial security.
What matters most is aligning your investments with your lifestyle and long-term needs. A balanced approach — one that provides stability today and growth for tomorrow — helps ensure your money lasts as long as you do.