The Money-Saving Secret Every 75-Year-Old Needs to Know


How Much Money Should You Have in the Stock Market at Age 75?

As you approach your 75th birthday, you’re likely contemplating your retirement portfolio and wondering how much of it should be invested in the stock market. Traditionally, financial wisdom has advised individuals in their 70s to shift towards low-risk bonds and cash accounts, steering away from the potentially higher volatility of stocks and mutual funds. While this advice still holds merit, the landscape has changed significantly. People are living longer, and as a result, it may be wise to allocate a higher proportion of your portfolio to stocks than was recommended several decades ago.

Shifting Investment Strategies Among Older Americans

Recent data reveals a shift in investment strategies among older Americans. A substantial portion of seniors in their 70s and beyond are embracing a more stock-heavy portfolio. According to The Street, nearly one-quarter of seniors aged 75 to 84 who hold taxable brokerage accounts at Vanguard have nearly a 100% weighting in stocks. Even one-fifth of investors aged 85 and older follow a similar investment strategy.

One possible reason for this trend is to avoid capital gains taxes when selling stocks in non-retirement accounts. Mick Heyman, an independent financial advisor in San Diego, highlighted that investors who initially had 60% to 70% of their assets in stocks may now have increased their allocation to 70% to 80%.

However, the primary motivation for many older investors is ensuring a stable income during their retirement years. As Heyman emphasizes, “The most important thing is income. 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?”

Evolving Retirement Investment Mix

The ideal amount of money to have in the stock market at age 75 depends on a variety of factors:

1. Health and Preferred Lifestyle

Your health and the lifestyle you envision for your retirement years will greatly influence your investment strategy. Healthier individuals with active lifestyles may be able to take on slightly more risk in their portfolios.

2. Debt Load and Net Worth

Consider your current debt load and overall net worth. Reducing high-interest debt before retirement can free up more funds for investment, and a healthy net worth provides a safety net.

3. Monthly Bills and Income Sources

Calculate your monthly expenses and income sources, such as Social Security, pensions, or rental income. Understanding your cash flow will help determine how much of your portfolio should be allocated to stocks.

4. Risk Tolerance

Your comfort level with risk is a crucial factor. If you’re risk-averse, you may lean towards a more conservative portfolio. Conversely, those with a higher risk tolerance may choose a more aggressive approach.

5. Evolving Investment Formulas

Historically, the rule of thumb was to subtract your age from 100 to determine the percentage of your portfolio to invest in stocks. For a 75-year-old, this would result in a 25% allocation to stocks. However, due to increased life expectancy, this formula has evolved. A more contemporary guideline suggests subtracting your age from 120 or even 110. Thus, at age 75, you might aim for a 35% to 45% allocation to stocks. If your portfolio totals $100,000, this translates to holding no less than $35,000 and no more than $45,000 in stocks.

6. Expert Insights

A recent analysis by Empower, a financial services company, found that investors in their 70s and over maintain between 31% and 33% of their portfolio assets in U.S. stocks and between 5% and 7% in international stocks. This allocation allows for potential growth while minimizing risk.

In terms of bond holdings as a percentage of their overall portfolio, older investors tend to have a higher percentage. This allocation serves as a safety net, offering stability and a source of regular income.

7. Alternative Investments

Older investors typically allocate a smaller portion of their portfolio to alternative investments, such as real estate or commodities. This strategy may help diversify the portfolio further.


In conclusion, determining how much money you should have in the stock market at age 75 involves a nuanced evaluation of your individual circumstances. Consider factors such as your health, lifestyle, debt load, net worth, monthly expenses, income sources, and risk tolerance. Evolving formulas suggest a more significant allocation to stocks as life expectancy increases, but this should be tailored to your specific situation. Additionally, expert insights and diversification into alternative investments can enhance your retirement portfolio’s stability and potential for growth. Always consult with a financial advisor to create a personalized investment strategy that aligns with your long-term financial goals.

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