Retirees Should Keep 40%-80% in Equities to Cut 30-Year Runout Risk
Updated
Updated · CNBC · Aug 8
Retirees Should Keep 40%-80% in Equities to Cut 30-Year Runout Risk
2 articles · Updated · CNBC · Aug 8
Summary
Financial advisors now say many retirees should hold 40% to 80% of their portfolios in stocks, a sharp shift from the old rule of cutting equity exposure to about 30% at retirement.
That higher allocation is meant to preserve income and purchasing power over retirements that can last 30 years or more, with advisors framing equities as protection against inflation and longevity risk rather than pure risk-taking.
Typical recommendations still vary by age and resources: clients in their late 60s and early 70s may hold 40% to 60% in equities, while even 80-year-olds may keep 20% to 40%, often tilted toward dividend-paying and diversified holdings.
Advisors said allocations should be stress-tested and reviewed at least annually, using more conservative stock-return assumptions of about 6% to 7% and avoiding concentrated bets or highly volatile assets.
The guidance matters for a swelling retiree population: more than 11,200 Americans turn 65 each day, or over 4.1 million a year, from 2024 through 2027.