Retirees Are Asking: Are There New Risk Rules For My Money?
Executive Summary
For years, investors were told to scale back risk automatically as they aged. But today’s retirees may spend 30 years in retirement—longer than ever before. That changes the nature of risk; it’s now about balancing market exposure with inflation, longevity, and income stability. Understanding the new “rules” of risk can help you protect your lifestyle without sacrificing growth.
Want to watch an in-depth exploration of this topic?
Check out this video on my YouTube channel, @SavvySteward: How to Know When YOU Should Retire (The Full Picture Method)
Take the free “How Much Do I Need To Retire” Quiz here:
https://secure.kingsview.com/keith-savvy-steward-quiz-youtube#q1
Retirees Are Asking: Are There New Risk Rules For My Money?
Should your investment approach change after 60? Probably. But it might not be in the way you think. The old rules about automatically becoming more conservative with age don’t always apply, especially when retirement can stretch across three decades.
Why doesn’t age alone determine risk tolerance?
Risk capacity isn’t tied to your birthdate. It’s shaped by your goals, resources, and time horizon. Some 65-year-olds can afford to invest more aggressively than 45-year-olds because their income streams, pensions, or savings provide stability. The key is to match your portfolio to your circumstances, not to an age-based formula.
What’s wrong with the old 60/40 rule?
The traditional rule says subtract your age from 100 to find your stock allocation, so at 60, you’d hold 40% stocks and 60% bonds. That worked when retirees lived 10 to 15 years past retirement. But with today’s 25–30-year retirements, it risks leaving too much growth on the table.
What risks matter most in retirement besides market volatility?
Market swings grab headlines, but they’re not the only risks to consider. Three others often cause bigger long-term problems:
- Inflation risk – rising prices reduce your purchasing power.
- Longevity risk – living longer than expected can drain savings.
- Sequence of returns risk – poor market years early in retirement can hurt income sustainability.
Balancing these risks is just as important as managing volatility.
What are the risks of being too conservative or too aggressive with your retirement portfolio?
Playing it too safe feels comforting, but over 20 years inflation erodes purchasing power dramatically. On the other hand, chasing growth with a heavy stock allocation exposes you to significant losses if markets drop just as you begin withdrawals. Both extremes can damage your plan; one slowly, the other suddenly.
How can retirees balance growth and protection when investing after 60?
The right allocation depends on when you’ll need the money and what income you already have in place. If pensions, Social Security, or business income cover most of your needs, you may opt for more growth in the early years. If you’ll depend heavily on your portfolio right away, more stability may be necessary.
The key is flexibility. A “set it and forget it” 60/40 mix won’t fit every retiree. Instead, design an allocation that reflects your timeline, income sources, health, and family needs. The new rules of risk aren’t about age—they’re about aligning your investments with real life.
Real wealth starts with real life. Don’t just plan the numbers. Plan the life.
Contact Information
Keith Demetriades, CFP®, CKA®, believes real wealth starts with real life. He created the 4D Client Experience to help guide decision-making and ensure your money works as a tool to support your life. If you’re ready for a financial plan that reflects how you live and what you’re building toward, contact Keith at (806) 223-1105 or visit Kingsview Partners.
Disclaimer: The information provided in this blog is for educational purposes only and should not be considered financial advice. Please consult a qualified financial advisor to discuss your specific situation and needs. Past performance does not indicate future results, and all investments carry risks, including potential loss of principal. Any financial product or strategy references are purely illustrative and should not be construed as endorsements or recommendations.
