How much should I have in stocks at age 70?
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).
Conventional wisdom holds that when you hit your 70s, you should adjust your investment portfolio so it leans heavily toward low-risk bonds and cash accounts and away from higher-risk stocks and mutual funds. That strategy still has merit, according to many financial advisors.
If you're 70, you should keep 30% of your portfolio in stocks. However, with Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age.
Indeed, a good mix of equities (yes, even at age 70), bonds and cash can help you achieve long-term success, pros say. One rough rule of thumb is that the percentage of your money invested in stocks should equal 110 minus your age, which in your case would be 40%. The rest should be in bonds and cash.
How much does the average 70-year-old have in savings? We were curious, too, so we asked. Our 2023 Planning & Progress study found that the average amount of retirement savings for 70-year-olds in the U.S. is $113,900.
It may make sense to hold a percentage of stocks equal to 110 or 120 minus your age. You should consider other factors in your investment strategy, including the age at which you want to retire and the amount of money you think you'll need.
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.
| Age | Average 401(k) | Median 401(k) |
|---|---|---|
| 50s | $558,740 | $247,338 |
| 60s | $555,621 | $209,382 |
| 70s | $417,379 | $103,219 |
| 80s | $385,783 | $78,534 |
| Age group | Median retirement savings balance amount |
|---|---|
| 35-44 | $45,000 |
| 45-54 | $115,000 |
| 55-64 | $185,000 |
| 65-74 | $200,000 |
| Age Range | Average Retirement Savings |
|---|---|
| Ages 45-54 | $254,720 |
| Ages 55-64 | $408,420 |
| Ages 65-74 | $426,070 |
| Ages 75+ | $357,920 |
Can I retire with a $500000 portfolio?
Retiring on $500,000 may be possible, but it probably won't be easy. In addition to aggressive saving and strategic investing, you'll need to be honest about your needs and thoughtful with your spending.
It may be reasonable to hold cash to cover one to two years of living expenses.
Investors in their 20s, 30s and 40s all maintain about a 41% allocation of U.S. stocks and 9% allocation of international stocks in their financial portfolios. Investors in their 50s and 60s keep between 35% and 39% of their portfolio assets in U.S. stocks and about 8% in international stocks.
The average savings balance for people in their 70s is just $113,900. If you withdraw from that sum at a rate of 4% a year, which is what financial experts have long recommended, that amounts to just $4,556 of annual income.
Using the 4% rule with $500,000 in savings, a 70-year-old retiree can count on receiving $20,000 in the first year, which is not exactly a princely sum. Many 70-year-olds won't live for 30 years in retirement, however, so you may consider taking out a little more each year.
It is never too late to start saving money you will use in retirement. However, the older you get, the more constraints, like wanting to retire, or required minimum distributions (RMDs), will limit your options. The good news is, many people have much more time than they think.
| Age by decade | Average net worth | Median net worth |
|---|---|---|
| 60s | $1,634,724 | $454,489 |
| 70s | $1,588,886 | $378,018 |
| 80s | $1,463,756 | $345,100 |
| 90s | $1,318,023 | $315,085 |
Putting that much aside could make it easier to live your preferred lifestyle when you retire, without having to worry about running short of money. However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.
Reinvest Your Payments
The truth is that most investors won't have the money to generate $1,000 per month in dividends; not at first, anyway. Even if you find a market-beating series of investments that average 3% annual yield, you would still need $400,000 in up-front capital to hit your targets. And that's okay.
A common rule of thumb is the 50-30-20 rule, which suggests allocating 50% of your after-tax income to essentials, 30% to discretionary spending and 20% to savings and investments. Within that 20% allocation, the portion designated for stocks depends on your risk tolerance.
Should seniors invest in stocks?
Exposure to stocks should remain an important part of your allocation target, even in retirement. However, a possible need to access these assets for income in the near term means you are more susceptible to short-term risks.
The 4% rule entails withdrawing up to 4% of your retirement in the first year, and subsequently withdrawing based on inflation. Some risks of the 4% rule include whims of the market, life expectancy, and changing tax rates. The rule may not hold up today, and other withdrawal strategies may work better for your needs.
If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.
With $800k initially saved, you could withdraw $40k-60k annually and still have your portfolio last between 19-28 years. The higher your spending amount, the faster your savings get depleted. Assessing your specific retirement costs and life expectancy is key to determining withdrawal rate.
The above chart shows that U.S. residents 35 and under have an average of $30,170 in retirement savings; those 35 to 44 have an average $131,950; those 45 to 54 have an average $254,720; those 55 to 64 have an average $408,420; those 65 to 74 have an average $426,070; and those over 70 have an average $357,920.
