Ask Terry Questions stock percent 63 yr old retired

stock percent 63 yr old retired

By Terry Savage on May 13, 2013 | Financial Planning / Retirement

What % of stock in a 1.4 million portfolio should I have? I’m retired with an annual income of 40,000. Right now I have only 13% in stocks and know I should have more.

Thank You,

SAVAGE SAYS: There’s no set percentage, and a lot depends on your age and other income. BUT, where is the rest of your money invested? That’s the real question. If it is in bonds, you should realize that you’re taking as much risk as you would with stocks, actually even more. When (not if, but WHEN), interest rates rise, then the market price of your bonds will fall. You’ll be stuck with old, low-rate bonds when new bonds come out with higher rates. No one will want your old low rate bonds at full price!? That could devastate your portfolio.

Now if you have the rest of your portfolio in short-term Treasury bills, or money funds (“chicken money’) you know you won’t lose money because of risk. But even 3% annual inflation will cut your buying power in half in 25 years!? That’s one good reason for owning a more diversified stock portfolio — such as a S&P 500 index fund. Since you’re only 63, you’ll need some growth to offset that inflation — and that’s what stocks provide.

My real suggestion is that you consult a Certified Financial Planner (not a broker!)? or go to and ask about their retirement income modeling service. It’s free if you have money in their funds — and you could use their money market fund for some of your chicken money. They will evaluate your portfolio and your likelihood that your money will last as long as you do!

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