For optimal viewing experience, please use a supported browser such as Chrome or Edge

Download Edge Download Chrome

Investing in your 60s and beyond

Published on April 19, 2023 | LPL Financial

Once you are in your 60s, you are likely to focus less on growing your retirement funds than answering, “When do I retire?” And once you crack open your nest egg, how should you allocate its contents? The answer often lies in a substantial shift in your investment strategy. Here are some ideas for investing in your 60s and beyond.

Preliminary Questions

Before you settle on a plan, you need to be able to answer a few questions. These include:

  • How long do you need your savings to last, and how long are you likely to live?
  • How many years might you be in retirement?
  • What are your expected annual expenses in retirement?
  • What is your non-invested income, such as pensions, Social Security, and annuity payments?

By having an idea of how much you need in retirement and how much income you may expect to receive outside of your investments, you then calculate how much you need to withdraw from your retirement funds.

Allocating Your Retirement Assets

Everyone’s safety threshold is different—but most people appreciate having a balanced portfolio of CDs and high-yield savings accounts with stock holdings. However, a too-conservative portfolio may not earn enough to outpace inflation, while a too-aggressive portfolio might leave you vulnerable to sudden market drops.

There are a few different ways to approach this. One of the most popular ones is the “glide path” strategy.1 Subtract your age from 100, and that is the proportion of assets you should have in stocks. So, for example, a 40-year-old would want at least 60% of their portfolio in stocks; a 70-year-old would want no more than 30% of their portfolio in stocks. The remainder of the portfolio’s allocations might be to bonds, CDs, money-market accounts, or other assets.

Planning Withdrawals from Your Accounts

Once you become a certain age, you are subject to the required minimum distributions (RMDs).2 These are annual minimum distributions you must take from a traditional individual retirement account (IRA) and 401(k) plans. The Secure Act 2.0 increases the age that RMDs begin to age 73 for individuals who turn 72 on or after January 1, 2023. Also, a person who is 72 in 2023 is not required to take an RMD for 2023. Because RMDs increase your taxable income, many approaching 73 might benefit from working with a financial professional to manage their tax liability or reallocate withdrawals into other accounts.

But before RMDs become an issue, you may still need to make regular cash withdrawals from your retirement accounts. Some accomplish this by withdrawing a flat 3% of their initial balance each year, adjusting for inflation. Depending on the investments in the portfolio, these modest withdrawals may maintain or permit your portfolio to grow from year to year.

Whatever system you choose, it is important to be consistent. However, if a particular method is not working for you, switching to something that does is fine. A financial professional may help you evaluate where you are, discuss your goals and expectations, and design a plan to help manage resources.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05361931


Footnotes

1Glide Path

2Retirement Plan and IRA Required Minimum Distributions

Related Resources

Webster InvestmentsArticles
Beat Inflation with Your Back-to-School Budget
Back-to-school season is always a busy time, but in 2025, it comes with a bigger-than-normal price tag. Between inflation, tariffs, and general economic uncertainty, everything from pencils to laptops may cost more this year. According to Business Insider1, inflation is projected to rise to around 5% by mid-2025. For many families, that means tighter budgets […]
Webster InvestmentsArticles
A Financial Planning Guide for Families with Disabilities
About 61 million adults in the U.S. live with a disability. Many of these disabilities are serious enough to impact a person’s daily life.1 There may be financial benefits available to those whose disabilities leave them unable to hold down a job. However, these benefits may come with strict rules and regulations, such as limits […]
Webster InvestmentsArticles
Tips for the Fast Growing Sandwich Generation
Finances are dicey for those simultaneously caring for their parents and kids Over the last 20 years, the median-age for Americans (the median age is the point where exactly half the population is older and the other half is younger) has increased by about 3 ½ years. Today, the median age is 38.8 years. But […]

Connect With Us

Learn more about Webster products, services and the communities we serve.