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Retirement Investing in Your 60s and Beyond

Retirement investing doesn’t have to be a tradeoff between paying for living expenses and not outliving your nest egg

Up to now in our investing by age series, it’s been all about growing your investments to meet your retirement goals. Each decade shifted a little more to safety but by the time you’re in your 60s, retirement investing takes over and the priority is on income and protection.

But with people living well into their 80s and beyond, you still need to grow your investments in retirement so you don’t risk running out of money.

That means holding some retirement investments that grow with inflation while still being safe enough to pay your expenses.

Don’t miss all five posts in our retirement investing series:

How to Invest in Retirement

You’ve got to start your investing strategy with a plan that accounts for your own personal needs. Are you tired of hearing me say that yet?

While the basic retirement investing plan below can guide you, your own situation could mean shifting assets around a little.

  • Someone with a portfolio worth 30+ years of spending needs can afford to take a little more risk and may want more retirement investments in stocks. With a large enough portfolio, you’re not worried about running out of money and more in stocks will give you more to leave as an inheritance.
  • Someone with retirement savings worth less than 10 years of spending needs may need to reassess spending and seriously scale back on risks to avoid losing too much in a stock market crash. This is where a lot of people are in their retirement planning so don’t feel like you’re alone.

Refer back to this article to learn how to customize your personal investment plan for your needs.

Stocks for retirement investing at 60 and beyond

A good starting point for retirement planning in your 60s is to have about 40% in stocks, 35% in bonds, 10% in real estate and 10% or 15% in cash.

Compared to the portfolio of your 20s, the investment in stocks has come down quite a bit but is still enough to beat the dollar-destroying effects of inflation. Even on low levels of inflation around 2%, your dollar buys half of what it did after 30 years.

Your portfolio may be able to cover that $36,000 in living expenses now but will it cover about $72,000 annually 30-years from now?

retirement investing 60s

An Example Investment Portfolio for Investing at 60 and Beyond

Even with a smaller investment in stocks, you can still expect a solid return from this conservative retirement portfolio. These percentages should provide a total return of between 4.25% to 6.25% over several years. That’s using historic average returns for each investment class.

As with other investing by age posts, you want to hold a mix of stocks in large and small companies and across different sectors. Since your bonds and other retirement investments will provide for living expenses, you don’t have to worry too much about any one particular sector like technology or energy crumbling.

You should have time to let your stocks rebound so don’t panic-sell your retirement investments.

Bonds and Cash Investments in Retirement Planning

The bond and cash portion of your retirement investments are going to provide for ongoing living expenses. With more than a third of your nest egg in bonds, you’ll need a mix of different maturities and yields to balance income with risk.

  • Short-term bond prices will rise and fall less with changes in interest rates.
  • Long-term bonds provide higher yields but may lose their value on changes in rates and inflation.
  • S. Treasuries provide the ultimate in safety but pay almost nothing above inflation
  • High-yield bonds (also called non-investment grade) aren’t necessarily ‘junk’ bonds as they are also known but do suffer risks of non-payment
  • Investment-grade corporate bonds are a good tradeoff between yield and safety

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The guide details every type of bond and how to build a diversified portfolio. You’ll also get two strategies for investing in bonds that will save you money and time. An Amazon best-seller in multiple categories, available on Kindle, paperback and audio.

The idea of holding cash is to provide for those rare occasions when both stocks and bonds lose their value in a selloff. Check out the bucket approach to retirement investing for how to use your investments to pay for living expenses.

Holding some money in real estate offers a good balance between holding real assets that keep their value against inflation but still providing some income and growth. Other than the most recent real estate bubble, investors in REITs and direct ownership in property has offered a fairly consistent return.

Many retirees may choose to have nothing in ‘other’ assets like private equity and startup investing. I wouldn’t hold more than 5% in these or the money you expect to pass on to heirs. These investments can be difficult to get out of and can take five years or longer to pay off.

As for how to change your retirement investing through your 70s and 80s, you can gradually shift money from stocks to bonds to provide a little more safety and income. One of my favorite approaches to managing retirement investments is the bucket approach, detailed below.

Using the Bucket Approach for Retirement Investing

With the collapse of the pension system and defined benefits retirement plans, retirement investing has taken center stage. The bucket system is a great way to separate and manage your nest egg to provide safety and income while still offering the potential for growth.

retirement investing stocksThe bucket system calls for separating your investments into three groups. The first group is invested in cash investments like very short-term bonds and money-markets. You won’t get much return from these but they are the safest of safe and will provide for current expenses.

Your second bucket includes longer-term bonds, maybe maturities of five to ten years, and income producing stocks in relatively safe sectors. The bucket is meant to produce cash to refill your cash bucket as you spend it down through the year.

The final bucket of retirement investments is invested in stocks and high-yield bonds for growth. This doesn’t mean you’re putting your money in high-risk penny stocks even in this bucket but a diversified mix of stocks of large companies.

  • Start with 18 to 24 months of expenses in your ‘cash’ bucket and use it to pay expenses
  • Each year or six months, move the cash produced from your second ‘income’ bucket to refill the ‘cash’ bucket.
  • Keeping between three to five years of expenses in your ‘income’ bucket.
  • During years of stock market gains, use the increase in your ‘growth’ bucket to help refill your ‘income’ bucket.

The bucket strategy for retirement investing helps to provide safe cash for living expenses as well as growth from stocks. Investors don’t have to worry about a stock market crash wiping out their portfolio because they can spend down their cash and income buckets while they wait for stock prices to recover.

Retirement investing doesn’t have to be a tradeoff between providing for living expenses and having enough to make it through retirement. Scale back your risky assets like stocks and consider using something like the bucket strategy for investing in retirement.





  1. I calculated my retirement income very well. I was however off on my expenses. Health care costs, including insurance and co-pays for tests, etc., were more than I expected. Also, I did not anticipate additional home improvement expenses. With that being said, we love retirement.

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