You’re 70. You’ve saved for decades. The market feels like a rollercoaster you no longer want to ride. The question "Should I get out of the stock market?" feels urgent, driven by fear of losing what you’ve built. The instinctive answer many jump to is a full, immediate exit. Move everything to cash and bonds. Sleep easy.
That instinct could be one of the most expensive financial mistakes you make in retirement.
Here’s the straight answer: No, a 70-year-old should not get completely out of the stock market. A total exit often trades short-term peace of mind for long-term financial insecurity. However—and this is crucial—your investment strategy requires a fundamental, thoughtful overhaul. It’s not about staying in or getting out. It’s about strategically repositioning for the next 20-30 years of your life.
What You'll Find Inside
Why "Getting Out" Can Be a Costly Mistake
The advice to "de-risk" as you age is sound, but it’s been distorted into a dangerous oversimplification. Let’s break down the three big reasons a full exit backfires.
Longevity Risk: Your Money Needs to Outlive You
This is the number one risk retirees underestimate. At 70, you have a significant probability of living into your 90s. Data from the Social Security Administration shows that a 70-year-old man has an average life expectancy of about 85, and a woman about 87. But averages are misleading—many will live longer.
That’s 15, 20, even 25 more years. If you shift all your assets into low-yielding bonds and cash, your portfolio’s growth may not keep pace with your withdrawals. You face the very real danger of slowly depleting your principal. A modest allocation to stocks is your primary tool to combat longevity risk by providing growth potential that outpaces inflation over these extended time horizons.
Inflation: The Silent Thief
Inflation doesn’t retire when you do. Even at a "moderate" 3% annual rate, inflation cuts the purchasing power of your money in half in about 24 years. A can of soup that costs $3 today will cost about $6 when you’re 94. Your fixed-income investments (like bonds) and cash savings often struggle to keep up.
Historically, equities (stocks) have been one of the most reliable hedges against inflation over the long term. Companies can raise prices for their goods and services, which can translate to rising profits and stock prices. Removing this hedge entirely leaves your portfolio exposed to erosion from the steady drip of rising costs.
Bonds Are Not a Risk-Free Haven
Here’s a non-consensus point many generic articles miss: loading up on long-term bonds when interest rates are volatile carries its own significant risk. If you need to sell a bond before it matures and interest rates have risen, you will sell it at a loss. This is called interest rate risk.
I’ve watched retirees panic-sell stocks in 2022 only to pour everything into bond funds, then panic again as those bond funds also lost value. They traded one type of volatility for another, misunderstanding the product. A "safe" portfolio of 100% bonds is not safe from principal fluctuation or inflation risk. It’s a different kind of risk profile, not an absence of risk.
How to Strategically Adjust Your Portfolio at 70
So, if not a full exit, what should you do? The goal shifts from accumulation to sustainable distribution. Your portfolio becomes an income-generating engine designed for durability. Here’s a practical framework.
| Asset Class | Primary Purpose | Sample Allocation for a 70-Year-Old | Specific Tool Examples (Not Recommendations) |
|---|---|---|---|
| Cash & Short-Term Reserves | Cover 1-3 years of living expenses. Peace of mind fund for market downturns. | 10-15% | High-yield savings accounts, money market funds, short-term Treasury bills. |
| High-Quality Bonds & Fixed Income | Provide stable, predictable income and reduce overall portfolio volatility. | 50-60% | A mix of intermediate-term Treasury funds, investment-grade corporate bond funds, TIPS (Treasury Inflation-Protected Securities). |
| Growth Assets (Stocks) | Fight inflation and provide growth to support income over a 20+ year retirement. | 30-40% | Low-cost, broad index funds (like S&P 500 or Total Stock Market), dividend-growing companies, global equity funds for diversification. |
This isn’t a one-size-fits-all prescription. A 70-year-old with a $3 million pension and portfolio can tolerate more stock exposure than one relying solely on a $500,000 IRA. The key is the function of each bucket.
Core Principle: The Bucket Strategy in Action
Think of your portfolio in buckets. Bucket 1 is cash for 2-3 years of expenses. You never sell stocks to pay the electric bill. Bucket 2 is your intermediate-term bond ladder, meant to refill Bucket 1 over the next 4-10 years. Bucket 3 is your long-term growth engine (stocks). In a good market year, you take profits from Bucket 3 to refill Bucket 2. This system creates a psychological and practical buffer, allowing your stocks time to recover from downturns without forcing you to sell low.
Implementation: A Step-by-Step Plan for This Month
1. Audit Your Current Holdings. List every account (IRA, taxable, Roth) and what’s in it. Categorize each holding as Cash, Bond, or Stock.
2. Calculate Your Annual Need. How much do you need from your portfolio after Social Security and pensions?
3. Build Your Cash Cushion. Set aside 2-3 years of that need in safe, liquid cash. This is your anxiety-reduction fund.
4. Rebalance the Rest. With the remaining funds, aim for a 60/40 or 50/50 bond/stock split. Use low-cost index funds for simplicity.
5. Automate and Review. Set up automatic withdrawals from your cash bucket. Review the entire plan once a year, not daily.
Common Traps & The Subtle Error Most Retirees Make
After advising clients for years, I see patterns. The biggest mistake isn’t being too aggressive—it’s being too conservative in the wrong way.
Focusing on Volatility Instead of Purchasing Power
Everyone watches the portfolio balance go up and down. Fewer track what that balance can actually buy over time. A portfolio that never drops 10% but loses 2% per year to inflation and fees is failing its core job. You must measure success by sustainable income, not by avoiding all market dips.
Putting All Your "Safe" Eggs in One Basket
I met a retiree who, fearing banks and the market, had 80% of his net worth in physical gold bars in a home safe. That’s not safety; that’s concentration risk and illiquidity. Safety comes from diversification across asset classes (cash, bonds, stocks, real estate), account types (taxable, tax-deferred, tax-free), and even custodians.
Ignoring Tax Efficiency
Where you hold which assets matters immensely. Generally, you want income-generating assets (like bonds) in tax-deferred accounts (IRAs) and growth assets (like stocks) in taxable or Roth accounts. Selling stocks in a taxable account can trigger capital gains taxes. A haphazard sell-off without a tax plan can hand a huge chunk of your savings to the IRS.
Two Stories: Robert vs. Susan
Let’s make this concrete with two hypothetical 70-year-olds, each with a $1 million portfolio in 2010.
Robert (Fear-Driven Exit): In 2010, still nervous from the 2008 crash, Robert sells all his stocks. He puts $900,000 into a bond fund and keeps $100,000 in cash. He needs $40,000 per year from his portfolio. His bond fund yields about 3%, generating $27,000. He must sell $13,000 of principal each year to make up the difference. By 2023, after consistent withdrawals and modest growth, his portfolio is worth about $700,000. Inflation has made his $40,000 need more like $55,000. He’s drawing down faster and is anxious.
Susan (Strategic Adjustment): Susan rebalances to a 50% bond / 40% stock / 10% cash allocation. She also uses the bucket strategy. In strong market years (like many in the 2010s), she takes some stock profits to replenish her cash and bond buckets. Her portfolio sees growth. By 2023, her portfolio is worth about $1.4 million. Her 4% withdrawal is now a higher dollar amount ($56,000), but it’s a smaller percentage of her total portfolio, making it more sustainable. She’s weathered downturns by spending from her cash bucket, not selling depressed stocks.
The difference over 13 years is stark. Robert’s strategy felt safer but created a slow-burn crisis. Susan’s strategy accepted managed risk to preserve purchasing power.
Your Action Plan: Steps to Take This Week
Don’t just read—act. This week, do these three things:
First, calculate your total liquid net worth and your annual after-tax income need. Know your numbers.
Second, isolate 2-3 years of needed income in a FDIC-insured savings account. This is your first line of defense.
Third, schedule a meeting with a fiduciary financial advisor (one legally obligated to act in your best interest) to review your current allocation and tax strategy. Come with your numbers and this article. If they reflexively tell you to sell all your stocks without a deep analysis of your lifespan and goals, get a second opinion.
Your Questions, Answered
The bottom line is this: Getting out of the stock market at 70 is rarely a smart strategy. Transforming your relationship with the market, however, is essential. Build a portfolio with clear purposes—income for today, stability for the medium term, and growth for tomorrow. That’s how you build retirement resilience, not by reacting to fear with a drastic, potentially irreversible exit.
