Financial Advisors Now Recommend Retirees Keep 40% to 80% of Portfolios in Stocks

The advice your grandparents got about retirement investing is outdated, and following it could leave you broke at 90.

For decades the standard playbook was simple: retire, dump most of your stocks, load up on bonds and cash, sleep easy. Advisors today say that's a good way to run out of money.

Cheri Belski, head of investment management solutions at LPL Financial in Fort Mill, South Carolina, told CNBC the old rule of thumb was to cut equity exposure to around 30% or less right after retirement. That's changed. "The new way of thinking is to get intentional about retirement, not conservative," Belski said.

Modern advisors are recommending retirees hold between 40% and 80% of their portfolios in equities, according to CNBC. That's a wide range, and it should be. There's no one-size-fits-all number here. It depends on age, other income sources, risk tolerance, spending needs and taxes.

The math behind this shift is straightforward. People are living longer. The Retirement Income Institute at the Alliance for Lifetime Income estimates more than 11,200 Americans turn 65 every day, over 4.1 million a year, from 2024 through 2027. A lot of those people will spend 25 to 30 years in retirement, not the 10 or 15 years the old planning models assumed.

Thirty years is a long time for inflation to chew through a fixed-income portfolio. Cash and bonds don't grow fast enough to keep pace with rising costs over three decades. Stocks historically do. That's the entire argument.

"To me, equities aren't about taking more risk, it's about giving your portfolio a fighting chance to keep up with your life," Belski said. "You're probably going to have 30 years in retirement. You want to make sure you have the assets to support it."

Stuart Katz, chief investment officer of Robertson Stephens in San Francisco, framed it similarly, telling CNBC retirees need long-term growth to address both longevity risk and inflation. Katz said the goal isn't to be aggressive, it's "growth with guardrails."

That's a fair distinction. Nobody serious is telling a 68-year-old to put their retirement savings into meme stocks or speculative crypto plays. The advice is to hold a diversified basket of equities, not gamble.

Collin Lindsey, managing director at the Lindsey Trost Group of Steward Partners in Lake Oswego, Oregon, generally recommends clients in their late 60s and early 70s keep 40% to 60% in equities depending on their other resources and risk profile. Lindsey's approach includes individual stocks, ETFs, unit investment trusts and REITs, but he draws a hard line against high-volatility bets. He specifically flags avoiding fresh IPOs, cautioning that newly public companies can carry outsized volatility that isn't appropriate for money a retiree needs to last decades.

That's not a reason to bet retirement savings on a speculative newcomer. Lottery tickets don't belong in a 401(k) you need to last three decades.

There's a legitimate counterargument here worth taking seriously. Critics of high equity allocations in retirement point out that sequence-of-returns risk is real. If a retiree is pulling money out of a heavily stock-weighted portfolio right as the market crashes, like it did in 2008 or briefly in 2020, that can permanently damage the account's ability to recover. Selling stocks at a loss to cover living expenses locks in losses that a portfolio with more cash cushion wouldn't have to take. That's not a reason to avoid stocks entirely, but it's why advisors talk about "guardrails," bucket strategies, and holding enough cash or bonds to cover a few years of expenses so retirees aren't forced to sell equities in a downturn.

None of the advisors quoted are suggesting retirees ignore that risk. The 40% to 80% range itself is the guardrail. It's a moving target based on individual circumstances, not a blanket mandate to go all-in on stocks.

A blanket "get conservative at 65" rule is bad advice for most people today, according to the advisors CNBC spoke with. But there's no universal replacement number either. Anyone approaching retirement needs an actual plan built around their own spending needs, other income streams like Social Security or pensions, and how much risk they can stomach without panicking and selling at the bottom. That conversation needs to happen with a financial advisor, not a rule of thumb passed down from a parent who retired in 1995.