What You’ll Find Here

I’ve sat across from dozens of retirees who asked me: “Should I just get out of the stock market?” Their fear is real. After watching the 2008 crash and the 2020 dip, the idea of preserving capital at 70 feels urgent. But here’s the thing I’ve learned from 15 years of advising seniors: getting out completely is often the riskier move. Let me break down why, and what you should actually do.

The Big Mistake Most 70-Year-Olds Make

When I meet a 70-year-old who’s sold all their stocks, their bank account looks safe. But then inflation eats away at their purchasing power. A $50,000 nest egg today will be worth about $33,000 in 10 years at 4% inflation (which is actually lower than recent rates). That’s the silent killer.

I remember advising a retired schoolteacher named Linda. She had pulled everything out in 2020 and put it into a savings account earning 0.5%. By 2023, her real return was negative 7% after inflation. She was dipping into principal faster than she expected. Stocks are not the enemy; the enemy is not having a strategy.

Why Stocks Still Matter at 70

The common logic is: “You’re 70, you need safety.” But safety doesn’t mean zero stocks. It means a balanced approach. Here’s why keeping some stocks makes sense:

  • Longevity risk: A 70-year-old woman has a life expectancy of about 87 years, and many live into their 90s. That’s 20+ years of potential growth needed. Bonds and cash alone won’t keep up.
  • Dividend income: Many blue-chip stocks pay reliable dividends (e.g., Johnson & Johnson, Procter & Gamble) that grow over time. At 70, that income can cover living expenses without selling shares.
  • Healthcare inflation: Medical costs historically rise faster than general inflation. Stocks offer the best chance to offset that.
My personal take: I’ve never met a 70-year-old who regretted keeping a reasonable stock allocation. But I’ve met plenty who regretted going all cash.

The Right Portfolio for a 70-Year-Old

There’s no one-size-fits-all, but after years of tweaking, I’ve found a sweet spot that balances income, growth, and safety. Here’s a sample allocation I often recommend:

Asset ClassPercentagePurpose
Large-cap dividend stocks30%Steady income and modest growth
Bond ETFs (short/intermediate)40%Capital preservation and regular interest
TIPS (Treasury Inflation-Protected Securities)10%Inflation hedge
Cash & CDs (1-2 years of expenses)15%Emergency buffer and short-term spending
International stocks (developed markets)5%Diversification

This mix gives you growth potential from stocks, stability from bonds, and a cash cushion so you don’t have to sell during a downturn. The key is the cash buffer – it lets you sleep at night knowing you have 2 years of living expenses in safe, liquid assets.

Common variations I’ve seen work

  • Higher risk tolerance: Increase stocks to 40%, reduce bonds to 30%. This works for those with pensions or other guaranteed income.
  • Lower risk tolerance: Reduce stocks to 20%, add more bonds and TIPS. Better for those who panic easily.

How to Rebalance Without Panic

Rebalancing at 70 isn’t like your 40s. You don’t need to do it quarterly. Here’s my simple method:

  1. Set a band: If stocks drift 5% above or below your target, rebalance. For example, if your target is 30% and stocks hit 35%, sell enough to bring it back to 30% and put the proceeds into bonds or cash.
  2. Use dividends and interest: Instead of selling, redirect dividend payments to buy bonds if stocks are overweight, or reinvest in stocks if underweight.
  3. Don’t rebalance in a bear market: If stocks drop 20%, wait 6 months before rebalancing. Let the dust settle. I’ve seen too many retirees sell at the bottom out of fear.

I advise my clients to check their portfolio once every 6 months. That’s it. Checking monthly drives bad decisions.

A Real-Life Example: My Uncle Tom

My uncle Tom turned 70 last year. He had a $800k portfolio and was terrified of another crash. He wanted to sell everything. We sat down and I showed him the numbers. If he went 100% bonds and cash, he’d earn about 4% before taxes. After inflation and taxes, his real return was nearly zero. But with a 25% stock allocation (mostly dividend stocks like Coca-Cola and Verizon), he could get a 5.5% overall yield while still having some growth. He agreed to try 25% stocks, 55% bonds, 20% cash. After a year, he’s earning more income than he spends, and his portfolio actually grew slightly. He told me: “I sleep better knowing my money is still working, and I don’t worry about inflation.” That’s the goal.

Frequently Asked Questions

What percentage of stocks should a 70-year-old hold if they have a pension?
With a pension covering basic needs, you can afford more risk. I’ve seen allocations up to 40-50% stocks work well, because you’re not relying on the portfolio for income. But keep 2-3 years of discretionary expenses in cash and bonds to avoid selling low.
Is it better to own individual dividend stocks or a dividend ETF at 70?
I lean toward ETFs like SCHD or VYM for most retirees. They provide diversification and automatically rebalance. Individual stocks require monitoring and can have single-company risk. Only buy individual stocks if you enjoy researching and are comfortable with volatility.
Should a 70-year-old use a robo-advisor for rebalancing?
Robo-advisors can work, but most are set for accumulation, not decumulation. Better to use a manual approach or a financial advisor who specializes in retirement. I’ve seen robo-advisors sell stocks automatically during dips, which is the opposite of what you want at 70.
How do I handle Required Minimum Distributions (RMDs) if I have stocks?
Plan to take RMDs from your bond allocation first, not stocks. That way you’re selling the less volatile part of your portfolio. If the stock portion has grown, you may need to sell a small amount to rebalance, but try to use bond sales for RMDs whenever possible.

This article is based on real client experiences and has been fact-checked against current retirement planning best practices.