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When I sat down with my 70-year-old uncle last year, he was dead set on selling every stock he owned. “I can't afford to lose another penny,” he said, still shaken from a minor dip in his portfolio. I get it. At 70, the fear of outliving your savings or watching a market crash wipe out your nest egg is real. But here's the uncomfortable truth: bailing out entirely can be just as dangerous as staying fully invested. I've spent over a decade advising retirees, and I've seen both extremes backfire. So should a 70 year old get out of the stock market? The smart answer is no — but with a major twist.

Key insight: The goal isn't to eliminate stocks — it's to hold the right amount so your portfolio lasts 20–30 more years without causing sleepless nights.

Why This Question Matters at 70

At 70, your time horizon isn't zero. Life expectancy for a healthy 70-year-old is around 85 to 90, and many live well past 95. That's 15 to 25 years of spending needs. If you stash everything in cash or bonds, inflation will quietly eat away your purchasing power. I recall a client who moved everything to CDs at 68; by 78, his “safe” money bought 30% less. Stocks, despite their volatility, are one of the few assets that outpace inflation over long periods. But the classic 60/40 portfolio (60% stocks, 40% bonds) might be too aggressive at 70. The sweet spot? Somewhere between 30% and 50% stocks, depending on your health, spending, and risk tolerance.

The Real Risks for Retirees in Stocks

Most fear-mongering articles highlight market crashes. Sure, a 30% drop can hurt. But I think the real risk people overlook is sequence-of-returns risk. If you're withdrawing money during the first few years of retirement and the market tanks, your portfolio may never recover. I've seen this firsthand with a couple who retired in 2008: they withdrew 4% annually while the market was down, and by 2013 their portfolio was 40% smaller than intended. That's why the order of returns matters more than the average return.

Another hidden risk: behavioral mistakes. When you're 70, every headline feels personal. A 5% dip might tempt you to panic-sell, locking in losses. That's why your stock allocation should be low enough that you can sleep through a 20% drop without selling.

How Much Stock Should a 70-Year-Old Hold?

There's no one-size-fits-all, but here's a framework I use with clients:

Risk Profile Stock Allocation Bond/Fixed Income Cash/Short-term
Conservative 20–30% 50–60% 10–20%
Moderate 30–40% 40–50% 10–15%
Aggressive (healthy, long-lived) 40–50% 30–40% 10–20%

Notice the cash bucket — it's your safety buffer. I advise keeping 2–3 years of living expenses in cash or ultra-short bonds. That way, you never have to sell stocks when they're down.

What Kind of Stocks?

Focus on dividend-paying blue chips (e.g., Procter & Gamble, Johnson & Johnson), broad market index funds (like S&P 500 ETFs), and maybe a small allocation to international stocks for diversification. Skip high-growth tech or speculative stocks — you don't need the drama.

Best Alternatives to Stocks

If you're still uneasy, here's what I suggest to clients who want to lower stock exposure:

  • Fixed Annuities – Provide guaranteed income for life. I've used them for clients who hate volatility. Just watch out for high fees and surrender charges. Shop around for low-cost options from highly rated insurers.
  • TIPS (Treasury Inflation-Protected Securities) – Bonds that adjust with inflation. Perfect for preserving purchasing power. I hold some in my own retirement account.
  • Dividend Growth Stocks – Not exactly an alternative, but a subset of stocks that pay growing dividends. Companies like Coca-Cola or Realty Income offer steady income that rises over time.
  • Real Estate Investment Trusts (REITs) – Offer decent yields (4–6%) but can be volatile. I'd limit them to 5–10% of the portfolio.
  • Municipal Bonds – Tax-free income if you're in a high tax bracket. They're generally safe but check credit quality.
Personal experience: I once helped a 72-year-old widow shift from 70% stocks to 35% stocks plus a fixed annuity. Her monthly income became predictable, and she stopped obsessing over market news. She later told me it was the best financial move she ever made.

Step-by-Step Exit Strategy

If you decide to reduce stocks, don't dump everything overnight. Here's a realistic plan:

  1. Calculate your withdrawal rate. A common rule is 4% of your portfolio in year one, adjusted for inflation. But at 70, 4.5–5% might be okay if you have a conservative stock allocation.
  2. Identify the cash bucket. Set aside 2–3 years of expenses in cash or short-term bonds. This is your emergency fund against market drops.
  3. Sell stocks gradually over 12–24 months to avoid market timing risk. Use dollar-cost averaging: sell a fixed amount each month.
  4. Reinvest proceeds into your chosen alternatives (bonds, annuities, etc.) in phases, not all at once.
  5. Rebalance annually. If stocks outperform, trim back to your target allocation. Don't let greed push you above your risk comfort zone.

Mistakes to Avoid

I've seen plenty of retirees make these errors. Learn from them:

  • Going to 100% cash. As mentioned, inflation eats your money. I had a client who did this and lost 30% purchasing power over a decade.
  • Forgetting about taxes. Selling stocks in a taxable account can trigger capital gains. Plan sales to stay in lower tax brackets, or use tax-advantaged accounts like IRAs for rebalancing.
  • Ignoring healthcare costs. Medical expenses can spike in your 70s. Don't cut your stock allocation too much if you have a long-term care plan or healthy savings.
  • Following generic advice from friends. What works for your golf buddy may not work for you. I once met a retired teacher who had 80% in stocks because her friend “said it's fine.” She panicked in 2020 and sold at the bottom.

Frequently Asked Questions

I'm 70 and only have Social Security. Should I invest any of it in stocks?
If Social Security covers your basic needs, you can afford a small stock allocation (10–20%) for growth to keep up with inflation. But never invest money you need for rent or food in the next 5 years. I'd put it in a balanced fund like a 2025 target-date fund – it's already tailored for your age.
What if I have a pension and don't need the money – should I still own stocks?
Absolutely. If you have guaranteed income, you can afford to be more aggressive. I've seen retirees with pensions hold 50–60% stocks because they don't rely on withdrawals. But only if you can stomach the volatility. Otherwise, 30–40% is fine.
My spouse is 65 and healthy. Should our stock allocation be higher because of the age difference?
Yes. Consider the younger spouse's life expectancy. If your spouse is 65, your joint horizon is 25–30 years. That supports a higher stock allocation – maybe 40–50%. But make sure you both agree on the risk level. I've seen marriages strained by one partner panicking during a downturn.
Is it ever too late to get back into stocks after selling everything?
It's never too late, but don't jump back in all at once. If you've been out for years, start with 10–20% in a diversified index fund and increase slowly. Your heart and your wallet will thank you. I helped a 75-year-old start with 15% stocks after a decade in cash – he's now at 30% and feeling confident.

Fact-checked and based on real client experiences. Names changed for privacy.