When You Reach This Age, Your Portfolio Should Focus On Stability

Most savers looking ahead to the future know that there's a general, inverse correlation between age and risk tolerance. The closer you get to retirement, the less risk you should take on in your portfolio. This is because with fewer years between the present and the time when your investments will need to fund your life directly, there's less time to recover from value lost in a stock market crash or a bad stock pick that implodes on you. 

But when exactly should this change occur? Forbes found in 2025 that investors in their 30s tend to mix strategies, while traders reaching their 40s and 50s are more risk tolerant. At 55, risk appetite peaks and then starts to dwindle rapidly, with investors transitioning to more conservative tools to protect their existing wealth instead of chasing new growth opportunities. Moving into your 60s, a definitive shift toward stability and principal protection is essential.

There are many ways to ground your portfolio blend and adjust it as you age. One option is to use a simple age calculation rule that delivers a good starting framework. The 100-minus-age approach subtracts your age from 100 and gives you a number that represents a basic allocation percentage for stock holdings. Therefore, a 60-year-old might want to aim for a stock allocation of 40%, while a 65-year-old might seek to reduce it by another 5%.

In many cases, focusing on stability means rotating your primary investment exposure out of individual stocks. It certainly involves removing yourself from riskier tools like cryptocurrency or penny stocks, which can deliver extreme upside but leave you excessively vulnerable to collapses. 

That said, there's no reason to completely pivot away from stocks, and retirees who avoid the stock market are often setting themselves up for failure. In fact, many stable investment tools live within the world of stock trading; they just involve a different focal point than some might be used to chasing. ETFs and index funds are a great place to start. They bundle companies into a single stock market commodity, folding value together to deliver smoother performance with broad market exposure and reduced overall risk.

The classic value protector is the bond, though. Bonds deliver virtually guaranteed payouts at fixed rates you can count on. When you buy a bond, you know exactly what you'll earn when the investment reaches maturity, as well as the time required to hit that mark. As an example, the current 10-year U.S. treasury note carries a roughly 4.20% yield in early February 2026, according to Trading Economics. The same goes for Certificates of Deposit (CDs). High yield savings accounts offer less definitive returns, but they generally provide a safe place to park your cash, too. Mixing ETFs and other safer investment tools together alongside a diminished exposure to risk will protect a greater share of your nest egg against the worst possible outcomes in the market.