Let's cut to the chase. The question "Should a 70 year old get out of the stock market?" is usually driven by fear. A market drop shows up on the news, you look at your retirement account statement, and a cold wave of anxiety hits. The instinct is to run for the hills—to sell everything, move to cash or bonds, and sleep soundly. I've sat across the table from dozens of clients feeling exactly this way. The surprising truth? Completely exiting the stock market at 70 is often one of the most dangerous financial moves you can make for your long-term security. It's not about being aggressive; it's about understanding that the biggest risk isn't short-term volatility—it's outliving your money.

This isn't a one-size-fits-all decision. It hinges on your specific pile of money, your monthly spending needs, your health, and frankly, your gut tolerance for market swings. I've seen portfolios where a 30% stock allocation was too much, and others where 50% was not only appropriate but necessary. The old "100 minus your age" rule is a lazy starting point that misses the entire point of modern retirement planning.

What You'll Find in This Guide

Why Getting Completely Out of Stocks at 70 is a Recipe for Trouble

Think about what "safety" really means. Is it a portfolio value that doesn't bounce around? Or is it the ability to pay for groceries, healthcare, and maybe a trip to see the grandkids every year for the next 20 or 30 years? If you're 70 today, there's a significant chance you'll live into your 90s. That's a 25-year retirement horizon. Cash and high-quality bonds protect you from market dips, but they silently fail you against a relentless enemy: inflation.

I worked with a couple, let's call them Robert and Linda. After the financial crisis, they moved everything to CDs and Treasury bonds. "We're done with the rollercoaster," they said. Fast forward a decade. Their monthly income from those investments hadn't grown, but the cost of their medications, property taxes, and even their grocery bill had climbed steadily. Their "safe" portfolio was slowly losing purchasing power. They were safe from headlines, but not from reality.

Stocks, over the long term, have been the only major asset class to consistently outpace inflation. They provide growth potential that fixed income simply cannot match over decades. By removing them entirely, you're essentially guaranteeing that your portfolio's real value—what it can actually buy—will shrink every year. For a retirement that could last longer than your career did, that's a fatal flaw.

What's the Right Asset Allocation for a 70-Year-Old?

Forget the generic rules. Your stock allocation shouldn't be determined by your age alone, but by your withdrawal rate. This is the percentage of your portfolio you take out each year to live on. It's the single most important number in retirement planning, yet most people fixate on headlines instead.

Here's the connection: A higher withdrawal rate (say, above 4-5%) requires a more conservative portfolio because you're pulling money out so fast that a market downturn could devastate your principal. A lower withdrawal rate (below 3-4%) gives you more breathing room. If you have a generous pension and Social Security covering most of your bills, your portfolio is just for extras and emergencies. That means you can afford more market risk because you won't be forced to sell stocks at a low point to pay the electric bill.

Primary Income Source Withdrawal Need from Portfolio Suggested Stock Allocation Range Core Consideration
Heavy Reliance (Portfolio is main income) High (4%+) 20% - 40% Sequence of returns risk is critical. Focus on high-quality dividend stocks and keep 3-5 years of spending in cash/bonds.
Balanced Mix (Portfolio + Social Security/Pension) Moderate (2-4%) 30% - 50% You have a buffer. This is a common zone. Use stocks for long-term growth to combat inflation over 20+ years.
Minimal Need (Income covers lifestyle, portfolio is for legacy/extra) Low (0-2%) 40% - 60% Your time horizon is effectively multi-generational. You can stomach volatility for higher growth, as you won't need to sell in down markets.

Notice I didn't say "0%" for anyone. That's intentional. Even the most income-dependent retiree needs some growth engine to prevent their purchasing power from eroding over a potentially very long retirement.

The Real Danger: Sequence of Returns Risk (And How to Defuse It)

This is the concept that keeps financial planners up at night, yet most individual investors have never heard of it. Sequence risk isn't about the average return you get over 20 years. It's about the order in which those returns happen. A big market drop in the first few years of your retirement, when you're starting to withdraw money, can permanently cripple your portfolio's longevity, even if the long-term average return is good.

Hypothetical Scenario: Two retirees, Alex and Sam, each start with $1 million and need $40,000 per year (4% withdrawal), adjusted for inflation. They both achieve an identical *average* annual return of 6% over 25 years. But the order of returns is different.

  • Alex gets bad returns early: His portfolio suffers -15%, -10%, and 0% in the first three years. He's selling shares at low prices to fund his withdrawals.
  • Sam gets good returns early: His portfolio enjoys +15%, +10%, and +12% in the first three years. His portfolio grows before he takes much out.

After 25 years, Alex's portfolio is nearly depleted, while Sam's has grown substantially. The same average return, but a disastrously different outcome based solely on timing.

This is why the "get out" instinct is so strong—and so wrong. Exiting stocks entirely is an overreaction to sequence risk. The smarter play is to manage the risk, not eliminate the growth asset. You do this by holding a dedicated pool of safe assets—cash, short-term bonds, CDs—that covers 2 to 5 years of expected withdrawals. This is your "sleep at night" money. You spend from this pool during market downturns, allowing your stock allocation to stay invested and recover without you having to sell low. It's a tactical buffer, not a full retreat.

Building a "Worry-Less" Portfolio at 70

Let's get practical. What does this look like in a real brokerage account? I prefer a core-and-satellite approach for clarity and ease of management.

The Core (The Foundation - 70-80% of your portfolio)

This is your defensive, income-producing bedrock. It's designed for stability and to fund your near-term spending.

  • Cash & Short-Term Reserves (2-5 years of withdrawals): This isn't cash under the mattress. Think high-yield savings accounts, money market funds, and short-term Treasury ETFs (like ones that hold bonds maturing in 1-3 years). This is your sequence risk buffer.
  • High-Quality Bond Ladder: Individual Treasury notes or investment-grade municipal bonds (if in a high tax bracket) with staggered maturity dates. When one matures, it replenishes your cash reserve. Bond funds work too, but understand they fluctuate in value—individual bonds held to maturity give you certainty.
  • Conservative Stock Sliver: Even in the "core," you can include a modest allocation to low-volatility, dividend-growing stocks or a broad-based dividend ETF. This provides a slight inflation hedge within your safe haven.

The Satellite (The Growth Engine - 20-30% of your portfolio)

This is your carefully measured exposure to the stock market for long-term growth. It should be diversified and simple.

  • A Single, Broad Market ETF: Something like a total US stock market fund or a global stock fund. The goal here is maximum diversification with minimal cost and effort. Don't try to pick sectors or hot stocks.
  • Automatic Rebalancing: This is the magic trick. Once a year, check your allocations. If a great stock market run has pushed your satellite above its target percentage (e.g., from 25% to 32%), you sell that excess and move the profits back into your core cash and bond reserves. You're systematically "selling high" to fund your future spending. Conversely, if a crash shrinks your satellite, you'd eventually refill it from the core (buying low), though that's a less common move.

This structure gives you a clear plan for every market condition: spend from cash in a downturn, rebalance after a boom, and let the satellite compound over the decades you still have ahead.

Your Personal Decision Framework: Questions to Answer Before Moving a Dollar

Before you make any change to your portfolio, walk through this checklist. Write down your answers.

  1. What is my non-negotiable monthly spending? (Housing, food, healthcare, utilities).
  2. What is covered by guaranteed income? (Social Security, pension, annuity). Subtract answer 2 from answer 1. That's your annual gap that must come from your portfolio.
  3. What is my total portfolio value? Divide your annual gap from #2 by your total portfolio value. That's your withdrawal rate. Use the table earlier as a guide.
  4. Do I have 3-5 years of that "gap" sitting in cash/short-term bonds already? If not, building that buffer is your first priority, even if it means slowly selling some stocks in a disciplined way over months, not all at once in a panic.
  5. What is my true emotional risk tolerance? Be brutally honest. If a 20% market drop would cause you to call your advisor in a panic or lose sleep for months, your stock allocation should be at the lower end of any suggested range, regardless of the math. Peace of mind has real value.

This exercise moves you from a place of fear ("Should I get out?") to a place of strategy ("How do I structure what I have to last?").

Answers to Your Most Pressing Questions

My friend says I should just live off dividends and never sell any stocks. Is that a good plan for a 70-year-old?
It sounds appealing—live off the "fruit" without cutting down the "tree." The problem is twofold. First, dividend yields on broad market indexes are typically around 1.5-2%. If you need a 4% withdrawal rate, a dividend-only strategy forces you into a much narrower, riskier pool of high-yield stocks (like utilities or certain real estate sectors), sacrificing diversification. Second, companies can and do cut dividends during severe economic stress—precisely when you might need the income most. A total-return approach (spending a combination of dividends and carefully sold shares) from a diversified portfolio is far more reliable and less risky.
What if I have most of my money in a single stock, like the company I worked for? Should I sell it all now?
This is one of the most common and dangerous situations I see. Having your retirement and your former employer's fate tied together is extreme risk concentration. The answer isn't necessarily to sell "all" of it in one tax year, which could create a large tax bill. The answer is to create a disciplined, multi-year selling plan. Work with a tax advisor to determine how much you can sell each year while staying in a lower capital gains tax bracket. Use the proceeds to build the diversified core-and-satellite portfolio described above. Your goal is to systematically dismantle this single point of failure while managing the tax impact. Doing nothing is the riskiest choice of all.
I'm more concerned about leaving an inheritance. Does that change the advice?
Absolutely, and this is a crucial point often missed. If your primary goal is legacy, your time horizon isn't to your life expectancy—it's to your heirs' life expectancies, which could be 50+ years. In that case, your portfolio should be managed more like a young person's, with a significantly higher allocation to stocks (60%+), as the money has decades to grow and recover from volatility. You become a steward of long-term capital. This requires clear communication with your heirs and estate planning to ensure the assets are structured correctly in trusts or accounts that align with this long-term, growth-oriented strategy.
Bond funds lost value recently too. Are they really "safe"?
You've hit on a critical nuance. When interest rates rise, the market value of existing bonds (and thus bond funds) falls. A bond fund is not the same as an individual bond held to maturity. The "safety" in bonds for retirees comes from two places: 1) The certainty of an individual bond if you hold it until it repays its face value, and 2) Their role as a diversifier. When stocks crash, investors often flock to government bonds, so their prices can rise, offsetting stock losses. For the cash buffer part of your portfolio, use actual cash equivalents (money market, savings) or very short-term bonds (

The bottom line is this: at 70, the question isn't "in or out." It's "how much and how structured?" A thoughtful, layered approach that balances the need for stability today with the imperative for growth tomorrow is the only path to a retirement that is both financially and emotionally secure. It's about building a portfolio you can stick with, through all the market's inevitable ups and downs, for the long journey ahead.