How should I adjust my investment strategy as I approach retirement?
Conventional guidance suggests gradually shifting from growth-oriented investments (stocks) toward more conservative holdings (bonds, cash equivalents) as retirement nears. A common rule of thumb is to subtract your age from 110 to find your target stock allocation percentage. However, with longer life expectancies, many financial advisors now recommend maintaining meaningful equity exposure well into retirement to combat inflation and support a 20–30 year retirement horizon.
All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.
What is asset allocation and why does it matter at age 50+?
Asset allocation refers to how your portfolio is divided among different asset classes — stocks, bonds, real estate, and cash. At 50+, the mix becomes increasingly important because you have less time to recover from major market downturns. A well-diversified allocation balances growth potential with capital preservation. Review and rebalance your portfolio at least annually or after significant market movements.
Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss.
When should I start claiming Social Security benefits?
You can claim as early as age 62, but doing so permanently reduces your monthly benefit by up to 30%. Waiting until your Full Retirement Age (FRA) — 66 or 67 depending on your birth year — gives you your full benefit. Delaying further, up to age 70, increases your benefit by approximately 8% per year. If you are in good health and have other income sources, delaying often maximizes lifetime benefits.
