Retirees Should Keep Stocks in Their Portfolio, Advisors Say — Here's How Much

“The new way of thinking is to get intentional about retirement, not conservative,” said Cheri Belski, head of investment management solutions at LPL Financial in Fort Mill, South Carolina. She and other advisors stress that there is no single target allocation for everyone. Coming up with the right equity exposure means crunching numbers on factors such as age, risk tolerance, income, assets, spending needs and taxes, to ensure a nest egg lasts 30 years or more. The stakes are high: more than 11,200 Americans turn 65 every day — over 4.1 million a year — from 2024 through 2027, estimates the Retirement Income Institute at the Alliance for Lifetime Income.

“To me, equities aren’t about taking more risk; it’s about giving your portfolio a fighting chance to keep up with your life,” Belski said. Stuart Katz, chief investment officer of Robertson Stephens in San Francisco, described the right approach as “growth with guardrails” — no need to be overly aggressive, but long-term growth is essential to address longevity and inflation.

Collin Lindsey, managing director and wealth manager at the Lindsey Trost Group of Steward Partners in Lake Oswego, Oregon, generally recommends clients in their late 60s and early 70s allocate 40% to 60% to equities, depending on other retirement resources, lifestyle and risk profile. He advises limiting volatility, which likely means avoiding high-volatility assets like IPOs. A recent example: SpaceX, since its first trade on June 12, has lost more than $500 billion in market cap. “If you have a big downswing and you need to take the money out to live on, you’re never going to get it back,” Lindsey said.

Diversification remains important within equities, advisors said. Retirees should hold international stocks and stocks with different market capitalizations, some growth-focused and some income-focused through dividends. They warned against overexposing to a single sector such as technology, even if it appears to offer quick returns.

A retiree's equity allocation should not be fixed. Matt Gentzkow, managing director and wealth advisor at Coastal Bridge Advisors in Nashville, Tennessee, said that if expenses increase, a slightly more aggressive allocation may be needed for income. Considering whether to leave an inheritance also matters: a longer time horizon allows for more aggression. He likes to stress-test the financial plan using a conservative projected return of around 6% or 7% for stocks, even though the S&P 500 has returned double digits most of the past decade.

Brad Rollins, chief investment officer for Mariner in Tulsa, Oklahoma, advises revisiting the allocation at least once a year, checking whether the portfolio changed drastically or whether life changes — such as a health issue or supporting an adult child — require extra spending.