How Much Money Should You Have in the Stock Market if You’re 75?


SDI Productions / Getty Images

SDI Productions / Getty Images

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. But with people living longer, you should devote a higher proportion of your portfolio to stocks now than seniors 30 or 40 years ago.

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Many older Americans are following that advice. As The Street reported earlier this year, among older seniors with taxable brokerage accounts at Vanguard, nearly one-quarter of those aged 75 to 84 had nearly a 100% weighting in stocks. Even one-fifth of investors 85 and older had a similar weighting in stocks.

Mick Heyman, an independent financial advisor in San Diego, told The Street that one reason older investors are keeping more money in stocks these days is to avoid capital gains taxes for selling them (assuming that they are in non-retirement accounts).

“If you originally had 60% to 70% of your assets in stocks, maybe you’re now at 70% to 80%,” he said.

As for why many older investors are investing more in stocks, much of that has to do with income — an important consideration for those who expect to live a long time in retirement.

“The most important thing is income,” Heyman said “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?”

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Americans Living Longer, Meaning Retirement Investment Mixes Have Changed

In terms of how much money you should have in the stock market at age 75: That depends on several different factors, ranging from your health and preferred lifestyle to your debt load, net worth, monthly bills, income sources and risk tolerance.

One old bit of general wisdom cited by CNN is that you should subtract your age from 100 to come up with the percentage of your portfolio that should be in stocks. If you’re 75, for example, then you should have 25% 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. Using this formula, if your portfolio totals $100,000, then you should have no less than $35,000 in stocks and no more than $45,000.

According to a recent analysis from Empower, a financial services company, investors in their 70s and over keep between 31% and 33% of their portfolio assets in U.S. stocks and between 5% and 7% in international stocks. Among the investors that Empower analyzed, here’s the breakdown by age group based on average holdings:


U.S. stocks

International stocks










In terms of bond holdings as a percentage of their overall portfolio, here’s how older investors break down:


U.S. bonds

International bonds










Like most investors, seniors tend to have less money in alternative investments. Here’s a looks at the money older investors have in alternative investments and their percentage of the overall portfolio.


Median allocation of alternatives

Pct. of alternatives in overall portfolio










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This article originally appeared on How Much Money Should You Have in the Stock Market if You’re 75?


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