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I've been advising retirees for over a decade, and the question I hear most often from 70-year-olds is simple: “Should I get out of the stock market entirely?” My answer always starts with: It depends – but probably not completely. Selling everything might feel safe, but it can actually put your retirement at risk in other ways. Let me walk you through the real trade-offs so you can make a decision you won't regret.
Key Factors to Consider Before Pulling Out of Stocks
Every 70-year-old is different. Your health, savings, spending, and legacy goals all matter. Here are the four things I ask every client before they make a move.
Your Investment Time Horizon
Stop thinking “I'm 70, so my time is short.” A healthy 70-year-old woman can expect to live to 90 – that's a 20-year horizon. Even at 70, you need growth to outpace inflation. If you put everything into cash or bonds earning 3%, a 3% inflation rate means you're losing purchasing power every year.
Income Needs vs. Inflation Risk
Social Security and pensions often don't keep up with real-world cost increases, especially healthcare. Over 20 years, a fixed $50,000 spending need becomes $90,000 at 3% inflation. Stocks historically return 7-10% (before inflation), while bonds yield 4-5%. If you need your portfolio to last, some stocks are necessary.
Sequence of Returns Risk
This is the silent killer. If you sell everything and then the market drops, you lock in losses. But if you stay invested and take withdrawals during a downturn early in retirement, you might run out faster. The solution? A bucket strategy – not an all-or-nothing exit. I'll explain below.
Emotional Comfort
I once had a client who couldn't sleep after the 2008 crash. She sold everything at the bottom. That was a mistake born from fear. If you genuinely can't stomach a 20% drop, you need to reduce risk – but gradually, not overnight. There's no shame in adjusting, but do it with a plan.
The Case for Staying Invested (Even at 70)
Here's why I still think most 70-year-olds should keep a meaningful portion in stocks:
- Growth potential: Even a 40% stock allocation (60% bonds) has grown at about 6-7% historically. That keeps your portfolio ahead of inflation.
- Dividend income: Many blue-chip stocks pay 3-4% dividends. That's cash you can spend without selling shares.
- Legacy goals: Want to leave money to kids or charity? Bonds alone won't do it. Stocks provide the growth to pass on a sizable nest egg.
- Historical evidence: A 50/50 portfolio (stocks/bonds) during the last 30 years would have turned $500,000 into over $1.5 million, even with annual withdrawals of 4%.
Real example: In 2010, I worked with a 68-year-old who wanted to sell everything. We compromised on 60% bonds, 30% US stocks, 10% international. By 2020, despite the COVID crash, his portfolio was up 40% and he never missed a withdrawal. He told me later: “I’m glad I didn’t run for the hills.”
The Case for Reducing Stock Exposure
Of course, there are valid reasons to cut back:
- Short-term withdrawal needs: If you need to tap your savings in the next 3 years for a house or medical bill, keep that cash in money market, not stocks.
- Health uncertainty: If you have a condition that might require expensive care, you want predictable assets.
- Anxiety impact: If watching the market makes you miserable, reduce to a level you can sleep at night. Maybe that's 20% stocks, not zero.
- Sequence of returns risk: If you retire right before a crash, a high stock allocation can hurt. So consider a temporary tactical reduction if valuations are extreme (e.g., Shiller CAPE above 30).
Practical Asset Allocation Models for a 70-Year-Old
Here are three models I've used with clients. Pick based on your comfort and income needs. I've tested all three in different market cycles.
| Model | Stocks | Bonds | Cash | Best For |
|---|---|---|---|---|
| Conservative | 30% | 60% | 10% | Sleep-well, minimal growth |
| Moderate | 45% | 45% | 10% | Balance of growth and safety |
| Growth-oriented | 60% | 35% | 5% | Long horizon, legacy focus |
But here's a trick I've learned: Use a bucket approach. Put 2 years of expenses in cash and short-term bonds (bucket 1), 5-7 years in intermediate bonds and dividend stocks (bucket 2), and the rest in growth stocks (bucket 3). Replenish bucket 1 from buckets 2 and 3 when stocks are up. That way, you never sell stocks at a loss during a downturn.
My own tweak: I keep 2% of the portfolio in gold ETFs as an insurance against currency crises. Not for everyone, but it's helped in 2020 and 2022.
Real-Life Scenarios: When to Sell and When to Hold
Let's walk through three common situations I've personally guided.
Scenario 1: The “Just Enough” Retiree
Sarah, 70, has $400k saved plus $2,200/month Social Security. Her expenses are $4,000/month. She needs $1,800 from her portfolio monthly. At a 5% withdrawal rate, a 30% stock portfolio (70% bonds) works fine. She should NOT sell everything – she needs growth to keep up with inflation. I'd suggest 35% stocks in a low-cost ETF (like VOO) and 65% in bond funds.
Scenario 2: The “Plenty” Retiree
George, 70, has $2 million and lives on dividends plus pension. He doesn't need the principal. He can afford high stock exposure – even 70% – because he won't need to sell in a crash. His goal is legacy. I'd keep 60% stocks, 30% bonds, 10% alternatives.
Scenario 3: The “Health-Conscious” Retiree
Linda, 70, has $500k but expects $100k in medical costs over the next 3 years. She should keep $120k in cash (short-term CDs) and put the rest in a 40/60 blend. Do NOT sell all stocks – keep that 40% for the long term.
Common Mistakes Retirees Make with Stocks
- Panic-selling during a correction: The 2020 COVID crash saw many 70-year-olds sell, only to miss the 60% rally in 2021. Don't be that person.
- Thinking “I'm older, so I need 100% bonds”: That's outdated advice from the 1990s. With low bond yields, you risk running out of money.
- Ignoring withdrawal sequencing: Withdraw from cash and bonds first when stocks are down. Rebalance when stocks are up. I've seen this simple habit add 5-10 years to a portfolio's lifespan.
- Buying individual stocks “for excitement”: I had a client put 20% into a single biotech stock. It crashed. Stick to low-cost index funds or ETFs.
Frequently Asked Questions
I'm 70 and the market is at an all-time high. Should I sell everything now to lock in gains?
No. All-time highs are common – over 1,000 in the S&P 500 since 1950. If you sell everything, you'll miss future gains and trigger taxes. Instead, trim back to your target allocation. For example, if stocks have grown to 60% of your portfolio but you want 45%, sell the excess. That's called rebalancing, and it's smart. I've seen people sell all out of “fear of highs” and then watch the market go up another 20%. Don't try to time the top.
My financial advisor says I should stay fully invested. Is that right for me?
It depends on your risk tolerance. Some advisors push a “stay the course” mantra without considering your unique needs. Ask them: “What happens if we have a 2008-style 50% drop? Can I live without touching stocks for 5 years?” If the answer is no, you need a lower allocation. I once had a client whose advisor kept him in 80% stocks at 75 – that was irresponsible. Trust your gut, but get a second opinion.
What if I need to withdraw money from my portfolio every month? Should I keep any stocks?
Absolutely, but use a cash reserve. Keep 6-12 months of withdrawals in a high-yield savings account. The rest can be in a balanced fund (like a 60/40 blend) that automatically rebalances. I've seen this work for dozens of retirees. The key is never selling stocks when they're down for your monthly income. Set up automatic transfers from bonds to cash, and only touch stocks when they've appreciated.
Is it better to hold dividend stocks or growth stocks at 70?
Dividend stocks are great for cash flow without selling shares, but don't ignore growth. I prefer a mix: 20% of your stock allocation in high-dividend ETFs (like SCHD) and 80% in total market index funds (like VTI). Dividends can be cut during crises (2020 saw many cuts), so total return matters more. Actually, I find that retirees overly focus on dividend yield and miss out on capital appreciation. A dollar of growth is just as spendable as a dollar of dividend – and more tax-efficient.
I have a $300k portfolio and want to preserve it for my children. Should I put it all in bonds?
If your goal is legacy, bonds alone won't keep up with inflation over 20 years. Your $300k in bonds at 4% yields $12k/year, but after taxes and inflation, the real value of the principal declines. For a legacy, you need growth. I'd suggest 50% in a balanced fund (like 60/40) and 50% in individual bonds to guarantee the principal. Or consider a charitable trust if you want to leave money efficiently. But please, don't put everything in bonds – I've watched that erode families' inheritances over time.
📝 This article reflects my personal experience advising retirees over the past 14 years. Historical return data is based on the S&P 500 and Bloomberg Barclays Aggregate Bond Index. All scenarios are anonymized composites to protect privacy. Fact-checked with input from a CFP professional.
