When You Reach 60 Years Old, Here's What Your Stock Portfolio Should Look Like

While many factors can influence the makeup of an investment portfolio, perhaps the most significant is the level of risk you're willing to take. A commonly accepted rule is that as you get older, the amount of risk you can tolerate in your portfolio decreases. This means allocating less money to riskier investments like stocks, while increasing safer investments like bonds and cash. The reason for this correlation between age and stock allocation centers on the volatility of the stock market. If stocks go through a rough period, younger investors have more time to wait for their investments to recover. Older investors, on the other hand, often don't have the same time to weather the storm. So, when a person reaches their 60s, it's time to shift to a moderate portfolio from a more aggressive one. While you still need stocks to generate income, in general, the allocation should be lowered considerably — though the exact percentage will depend on various factors.

A frequently used calculation to determine the right target allocation is the 100 minus your age rule, which subtracts your age from 100 to arrive at the percentage that should be invested in stocks. Using that math, a 60-year-old should allocate 40% to stocks, with the remaining 60% in bonds, cash, or similar low-risk alternatives. While the 100 minus age rule may offer a simple starting point, it doesn't always account for an investor's individual needs. Someone with greater financial demands might needs to generate more income, therefore needing a higher allocation in stocks with higher returns. 

The 100 minus age rule also overlooks risk tolerance, which is largely a personal preference that dictates how comfortable you are riding out bigger dips in your portfolio. Even at an older age, a more aggressive investor seeking higher returns may be okay with the ups and downs that can come with a larger stock allocation. Meanwhile, a conservative investor might be happier forgoing better returns in favor of more bonds and cash in their portfolio. It's important to note that, regardless of a person's personal appetite for risk, a portfolio should be able to withstand a down market without derailing it.  

Another notable factor is longer life expectancies. If you're 60 years old today, you could likely live for several more decades, meaning your portfolio will need to earn enough returns to prevent you from running out of money. With a 40% allocation in stocks, that may not be the case. To account for this, some newer strategies call for increasing the rule to 110 or 120. Based on these calculations, a well-positioned portfolio for a 60-year-old could have closer to 50% to 60% in stocks and 40% to 50% in bonds or cash. In fact, according to September 2025 data from Empower, investors in their 60s had about 45% of their portfolios invested in stocks, with the remainder allocated between bonds, cash, and similar alternative investments.

For those looking for an easier way to change their asset allocations as they age, target-date funds have become a particularly popular way for investors to structure their portfolios. These funds allow investors to select a year — often when they plan to retire — and then sit back and let the fund automatically adjust the mix of stocks and bonds as the date nears. This helps to balance risk and returns, over time, without the headache of having to manage your own portfolio. For a 60-year-old, a typical target-date fund, according to Vanguard, would allocate approximately 60% to stocks — 36% to U.S. stocks and 24% to international stocks. Meanwhile, the 40% bond allocation would be split between 28% in U.S. bonds and 12% in international bonds. This allocation would moderate overall portfolio risk while continuing to deliver a good rate of return for a 401(k). 

Target-date funds have become so popular that, by the end of 2024, according to Vanguard's 2025 How America Saves report, nearly all retirement plans offered them, with 84% of participants using them. As of 2024, there were more than $4 trillion assets invested in these funds, according to Morningstar. With that said, while target-date funds can offer a simple solution for investors wanting a easier way manage their portfolios, there can be differences in how each fund sets their allocation mix, and what they charge for it, so it's important to do your due diligence before choosing one.