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As you approach retirement, your investment strategies will change over time

Retirees are most active in managing their investments

Updated:

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Mark Huffman
Reporter

Mark Huffman has covered consumer issues since 2004, with a special focus on protecting and empowering older adults. A former news correspondent for the Associated Press Radio Network, Westwood One, and ConsumerAffairs, Mark brings decades of journalistic experience to RetirementLiving.com. He is passionate about giving consumers a voice and helping them make informed decisions. Mark has also created educational content, including Senior Scam Alert, a video resource designed to help seniors recognize and avoid fraud. He holds a B.A. from the University of Kentucky and lives with his family in Richmond, Virginia.

Photo by Invest Europe on Unsplash

Key Insights

  • The majority of older investors prefer 60–80% equity allocations, but preferences grow more diverse beyond age 50
  • Older savers are more active in adjusting retirement portfolios compared to younger participants
  • Study highlights the importance of personalized retirement solutions as investors near retirement

If you’re approaching retirement, here’s something you should know. How you invest your retirement savings will likely change as you age, especially after you enter retirement. T. Rowe Price, in collaboration with experts from MIT Sloan School of Management and Stanford University, has tracked how investment behavior shifts as Americans approach retirement. 

Drawing from five years of 401(k) recordkeeping data, the research offers insights into how age impacts equity allocation preferences and portfolio management styles.

The analysis found that investor preferences become significantly more varied after age 50. While most older retirement savers maintain a moderate equity exposure between 60% and 80%, 10% avoid equities entirely, and 5% allocate fully to equities, indicating a spectrum of risk tolerance and financial objectives. 

This contrasts with younger investors between the ages of 24 and 30, most of whom hold over 80% equity exposure, in line with traditional life-cycle investment strategies.

“With older participants, we see that preferred asset allocation and financial circumstances are more diverse, making them strong candidates for personalized retirement solutions,” said Sudipto Banerjee, global retirement strategist at T. Rowe Price and co-author of the study.

When portfolio management revs up

The research also found that older investors take a more hands-on approach with their portfolios. Between 2019 and 2024, only 26% of investors aged 50 and older kept their equity allocation unchanged, compared to 46% of younger participants. 

About 50% of older investors who made adjustments increased their equity exposure, outpacing the 34% of younger investors who did the same. This proactivity suggests that many older savers are re-evaluating their risk appetite and income needs as they near retirement.

The study also explored what deters investors from making optimal decisions. Contrary to common belief, emotional fear is not the main roadblock. Rather, inattention and lack of engagement were identified as key mental hurdles. The findings stress the importance of removing friction and communicating the benefits of portfolio changes.

High investment fees and limited participant engagement remain critical challenges to broader adoption of personalized retirement strategies. The researchers stressed the need for transparent fee structures and thoughtful communication around changes in default investments.