--- title: Is Your Retirement Portfolio Too Conservative? Study Shows Many Retirees Make This Costly Mistake description: Avoiding stock market risk in retirement can backfire. Learn why some retirees may need more stocks and how to evaluate your investment mix. authors: - name: Liliana Hall role: Reporter url: https://money.com/author/liliana-hall/ bio: Liliana Hall joined Money in 2025. She is an Austin-based reporter for Money, where she covers a range of topics, including financial news, policy, banking, investing, passive income, financial planning and student loan debt. education: University of Texas at Austin at_money_since: 2025 articles: 151 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Shopping - Taxes social: - https://x.com/lilihallllllll - https://www.linkedin.com/in/liliana-hall/ editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 15 covers: - Retirement - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes published: '2026-11-11T19:32:18.000Z' modified: '2026-11-11T19:32:18.000Z' section: Retirement tags: - News - Retirement word_count: 1057 canonical: https://money.com/retirement-investments-too-conservative/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![hand holding retiree and investing stock related chart](https://img.money.com/2026/11/News-Retiree-portfolio-risk-taking.jpg) Protecting your [retirement savings](https://money.com/how-much-cash-should-you-keep-retirement/) from market losses makes sense. But playing it too safe with your investments could create a different problem: running out of money. A [new working paper](https://www.nber.org/papers/w35990) published by the National Bureau of Economic Research, or NBER, suggests common age-based investing rules may be too conservative for some retirees. Researchers found that some retirees working with financial advisors maintained substantially higher stock allocations than those without advisors. Their model suggests that dependable income from retirement benefits and employer pensions can provide a financial cushion, allowing retirees to take more risk with their investments. That doesn’t mean every retiree should rush to buy more stocks. But being too conservative can carry risks of its own. If your portfolio isn't growing enough to keep pace with inflation while you're withdrawing money to cover living expenses, your savings could lose purchasing power and become harder to stretch throughout retirement. The key is figuring out whether your portfolio is appropriately balanced for your income needs, spending goals and [how long your money needs to last](https://money.com/workers-overestimate-retirement-savings/). ## What the study found about retirees’ portfolios NBER’s latest research offers a closer look at how much risk some retirees are willing to take. Researchers analyzed financial account data from more than 36,000 Canadian retirees ages 65 to 85 who worked with two financial advisory firms between 1999 and 2013. They estimated that stock allocations in advised portfolios declined from about 75% at age 65 to 55% at age 85. Those allocations were roughly 30 to 40 percentage points higher than the stock holdings of non-advised retirees. They also exceeded the allocations recommended by the largest Canadian target-date fund family and common age-based investing rules. One such [rule](https://www.fidelity.co.uk/markets-insights/personal-finance/personal-finance/7-investing-rules-of-thumb/) subtracts your age from 100 to see the percentage of your portfolio to hold in stocks. That means a 75-year-old following the rule would hold 25% in stocks. By comparison, the NBER study found that retirees working with advisors held more than half of their portfolios in stocks even at age 85. Researchers also found that when retirees switched [financial advisors](https://money.com/is-a-financial-advisor-worth-the-fee/), their portfolios gradually shifted toward their new advisors’ investment styles, suggesting advisors influenced their clients’ decisions. ## Why some retirees may have room for more stocks An investment account is only one part of a retiree’s financial picture. The researchers' model treats dependable pension income as similar to holding a large bond portfolio. In other words, retirees who receive predictable income from pensions or other benefits may have a financial cushion that allows them to take more risk with their investment accounts. For retirees, the important question is how much of their living expenses their investment portfolios need to cover after accounting for other income. Michelle Riehn, a certified financial planner and founder of Money Momma, says retirees should consider whether their investments are keeping pace with inflation, rather than focusing only on avoiding losses. “A portfolio may look stable because it's not incurring losses, but if it isn't earning at a pace that protects your future purchasing power, it is likely too conservative,” Riehn says. Your ideal investment mix depends on your spending goals, when you'll need the money and how much market volatility you can tolerate. And retirement doesn't mean you'll need all your savings immediately. Someone who retires at 65 could have another 20 or 30 years of expenses ahead of them. “If you have time on your hands, it's important to maintain some portion of a well-diversified growth component that helps you achieve your goals while being able to sleep at night,” Riehn says. ## Start with your income needs, then review your investments Before deciding whether to add stocks, figure out how much work your portfolio needs to do. “Your financial plan should be based on your goals, not on return,” Riehn says. Start with the income you expect from [Social Security](https://money.com/social-security-trust-fund-running-out-of-money/), pensions and other sources, then compare that with your anticipated spending. The difference is your income gap: the amount you'll need to withdraw from savings and investments to cover your expenses. If Social Security and pension payments cover most of your essential expenses, you may have more flexibility to leave some investments untouched and pursue longer-term growth. Someone whose dependable income covers most essential expenses may have more flexibility to keep money invested for later. Someone who needs substantial portfolio withdrawals to pay those bills faces different constraints. “You may be surprised that a modest return will get you there and you may not necessarily need to take a lot of risk,” Riehn says. Next, review your current mix of stocks, bonds and cash across your accounts, including the investments held inside funds. An advisor can help you evaluate alternative allocations and explain how each would affect your ability to meet your goals. If the review supports increasing stock exposure, Riehn suggests considering a modest adjustment rather than a dramatic overhaul. “If your stock position is, say, 20%, maybe move it up to 25%,” she says. “And make sure the stock portion is well diversified, not in single stocks.” A broadly diversified stock mutual fund or exchange-traded fund can offer exposure to many companies without requiring you to select individual stocks. A narrowly focused fund offers less diversification than a fund spread across industries. ## Can your retirement portfolio weather a market crash? A plan for taking more investment risk should also explain how you’ll cover expenses during a downturn. Market losses can be particularly damaging when you’re withdrawing from a portfolio. Selling investments to pay bills leaves fewer assets available, potentially shortening how long your savings last. Riehn recommends asking an advisor to show potential losses in dollars and explain what they would mean for your expenses. Specifically, “If there's a severe downturn, what am I going to lose in dollars, and how will it affect my spending?” An advisor can use financial projections to show how different investment allocations might perform under various market conditions. Those estimates depend on assumptions and can’t guarantee results, but they can help make the trade-offs clearer. Also ask which assets would fund withdrawals during a downturn, what you would pay in advisory and investment fees and when the portfolio would be rebalanced. Rebalancing brings your investment mix back toward its intended allocation as market movements change the proportions. 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