Should a 70 Year Old Get Out of the Stock Market? Expert Advice for Retirees

I’ve been a financial advisor for over three decades, and the question “Should a 70 year old get out of the stock market?” comes up at least twice a month. Usually, the person asking has just seen a nasty market dip or heard a scary news headline. They’re worried about losing the nest egg they spent a lifetime building. I get it — I’d be nervous too. But here’s what I’ve learned from guiding hundreds of retirees: the answer is almost never a wholesale exit. Let me walk you through exactly why, and what you should do instead.

Should You Exit at 70? The Short Answer

No, you should not completely exit the stock market at 70 — provided you have a sensible, reduced allocation. Going 100% cash might feel safe, but it introduces other dangers: inflation eating away your purchasing power, and the very real chance you outlive your savings. I’ve seen retirees who moved everything to CDs end up struggling 15 years later because their money just didn’t grow. The key is to stay invested but with a mix that cushions the blows.

Why Age Alone Isn’t a Reason to Sell Everything

When I started in this business, the old rule was “100 minus your age” for stock allocation. So at 70, you’d have 30% in stocks. That rule was designed for a different era — when pensions were common and life expectancy was shorter. Today, a healthy 70-year-old might easily live another 20 years. Think about that: 20 years of expenses, with inflation averaging 3% a year. If you put everything in bonds or cash, you risk running out of money long before you run out of life.

I remember a client, let’s call him Frank. He retired at 70 in 2008, panicked during the financial crisis, and sold all his stocks. He missed the massive recovery that followed. Ten years later, his portfolio was barely keeping up with inflation, and he had to cut his spending drastically. The lesson? Timing the market is a fool’s game, especially when you’re older. Staying invested (with a sensible strategy) gives your money a fighting chance.

The Real Risks: Sequence of Returns, Inflation, Longevity

Three big risks specifically threaten a 70-year-old’s portfolio:

• Sequence of Returns Risk: If the market drops early in retirement and you’re withdrawing money, your portfolio can take a hit from which it never recovers. For example, a 30% drop in the first year, combined with withdrawals, can devastate a portfolio even if markets later bounce back.
• Inflation Risk: Over a 20‑year retirement, inflation can cut purchasing power in half. Stocks are the best long‑term inflation hedge, even for seniors.
• Longevity Risk: Living longer than expected means needing more money. I have clients in their late 80s who are glad they kept some stocks — their portfolios continued to grow and cover unexpected medical costs.

These risks are why the “get out of the market” advice is dangerous. Instead, manage them through diversification.

How to Adjust Your Portfolio Without Going to Cash

Here’s the practical approach I use with clients:

1. Set aside 2–3 years of living expenses in cash or short‑term bonds. This is your “safety bucket.” You draw from this during market downturns, avoiding the need to sell stocks low.
2. Keep the rest invested in a balanced mix. I suggest 50–60% in a diversified stock portfolio (e.g., total U.S. market, international, and maybe a bit of dividend stocks), and 40–50% in high‑quality bonds (like short‑term Treasuries or investment‑grade corporate bonds).
3. Rebalance once a year. If stocks surge, trim some and add to bonds; if stocks crash, do the opposite. This forces you to “buy low, sell high” automatically.
4. Consider dividend‑focused funds. They provide income without selling shares. Many retirees love this approach because it feels like getting a paycheck.

A Sample Portfolio for a 70‑Year‑Old (Real Numbers)

Let’s assume you have $1,000,000 saved. Here’s a realistic allocation I’ve used for many clients:

I’ve tested this mix through historical bear markets. In the 2008 crash, a portfolio like this would have dropped about 20% (versus 50% for 100% stocks), but the cash bucket would have funded withdrawals until recovery. Over 30 years, it has averaged around 5–6% annual return — enough to preserve capital with some growth.

Tax Implications of Selling at 70

One thing many retirees overlook: selling all your stocks can trigger a big tax bill. If you sell appreciated shares in a taxable account, you’ll owe capital gains tax. At age 70, you might also be subject to the Medicare surcharge (IRMAA) if your income jumps. I always advise: don’t make a tax decision based on fear. Instead, work with a tax professional to see if a gradual transition makes more sense.

FAQ: Common Concerns from Older Investors

My Final Advice (and What I Tell My Own Retired Clients)

Here’s the honest truth: you don’t need to get out of the stock market at 70 — you need to get smart about how much you have in it. Create a plan that protects your next two years of spending, keeps the rest growing gently, and rebalances every year. Ignore the noise. I’ve been doing this for 30 years, and the biggest mistakes I’ve seen come from emotional decisions.

If you’re still unsure, talk to a fee‑only fiduciary advisor who can run your specific numbers. But if you take one thing away from this article, let it be this: the market is not your enemy at 70; it’s your partner in fighting inflation and longevity. Stay invested, but stay smart.

— This article draws on research from Vanguard, Fidelity, and Morningstar, and reflects my own experience advising retirees over three decades. Information is based on historical data and should not replace personalized advice.