Asset Allocation for Investors Age 65: Retirement Years

Posted by Grace under Investing, Personal Finance on November 23, 2014

Here is the asset allocation for investors age 65. Learn how to distribute your investments if you are investor age 65 (retirement years). Asset allocation is very important not just to minimize the risk but to protect your investment as well.

Awhile ago, I wrote about how investments should be distributed when you are at 30 year-old and 45-year old. We found out that at that age, your investment percentage in high risk types of investments are between 30-40%.


Highest percentage allocated in equity mutual funds and other high growth securities, blue chip securities and business ownership because at that age you can still be able to take high risk. But when you are at 65 year old, how should you allocate your investments? To understand this topic, know the asset allocation definition. Here are the details.

For further information please read the asset allocation for age 30 and asset allocation for age 45.

After you have read the article mentioned, please continue in this guide. It is important that you have your emergency funds equivalent to 6 months of your income. This time you don’t need an insurance (at age 65) because we assume you have a lot of asset and acquired already your target earning asset that can help you not just to survive but enjoy your retirement years, and use these asset in unexpected events such as illness.

If you are planning to invest $1,000,000 today, where and how your investments should be distributed? See the pie chart to give you an idea on how to allocate your investments.

Related: Asset Allocation by Age and Risk Tolerance

Asset Allocation for Investors Age 65

10% Cash Investment: $100,000
10% CDs/T-Bills and Short/Medium Term Bonds: $100,000
20% Equity Mutual Funds and other High-Growth Securities: $200,000
20% Balanced Mutual Funds and Blue Chip Securities: $200,000
20% Business Ownership: $200,000
20% Real Estate Properties and/or Fixed Income Long-Term Bonds $200,000
100% Total Investments= $1,000,000

Make sure your assets in real estate, business ownership, blue chip securities are equally distributed. Make them 20% of your asset and the remaining cash and short-term bonds are both 10%. As you have noticed, this age (65) is the retirement age, this is how you should allocate your asset. You are no longer able to take high risk.

Low Risk Investments: Cash, CDs/T-Bills and Short/Medium Term Bonds, Real Estate, Fixed Income Long-Term Bonds
Medium Risk Investments: Balanced Mutual Funds and Blue Chip Securities
High Risk Investments: Business Ownership, Equity Mutual Funds, and other High-Growth Securities
Reference: Making Your Money Work 2, by Francisco J. Colayco, Colayco Foundation for Education, Inc., Anvil Publishing, Inc. 2005-2012, page 150

If you are planning to invest in equity mutual funds, it is a good decision to invest only with the best and top performing mutual fund companies. If you are planning to invest in the stock market, it is a great move to buy a blue chip stocks. At age 65, make sure you have already acquire your target earning asset and distribute it using the data we have discussed. I assume you already know your target earning asset during retirement age.

If you don’t know what is your TEA: Target Earning Asset, please compute your retirement target earning asset here.

It is important that you will invest early so that you can retire early. Some people tend to retire at 65, why not do it 50 if you can. It is possible to retire young and rich as long as you are willing to sacrifice to invest your hard earned money while you are still young.

But the problem and common cases is, when you are young you want to enjoy your earned money buying all the things you want because you reasoned out “I have a lot of time, maybe sooner I will invest it”. Remember, poor people spend it all while rich people invest it all. That’s why poor remains poor and rich are getting richer. Choose to be rich.

Retirement Period: Asset Allocation for Investors Age 65

Now you are a 65 year-old man, ask yourself; are you wealthy enough to retire? When is a person wealthy? If you have target earning asset, money that will work for you and the earnings of your target earning asset will cover all your lifestyle cost and expenses, you are wealthy, money will work for you and no effort on your part. If you have a lifestyle that cost you $10,000 a month and you have only $1 million dollars, it means you only have money good for 100 months or approximately 8 years and 3 months. That’s why, target EARNING asset is very important. Here in, saving money is not the idea to get rich and retire comfortably; investing is. That’s why the name is InvestmentTotal not SavingsTotal.

Important: if you are still young and have read this page, this is the best time to think about retirement. Retirement planning should be taken during younger years not the age of 65, the more years you have plan for it, the more chances you will enjoy it when it comes. Prepare for your future now.

1. How to Invest in the Stock Market?
2. How to Invest in Mutual Funds?
3. How to Invest in Unit Trust Funds Investments?
4. Different Types of Investments

Disclaimer: The data are for information purpose only. It is a good decision if you ask the financial experts or the registered/certified financial planner personally and ask how your investments should be distributed. The ideas written here if came from other person, a proper credit will be use by means of writing the references and the original sources.

Keep Learning Financial Education

Now you know the best Asset Allocation for Investors Age 65. In my next topic, I will write about the asset allocation for investors age 66 and above. Stay tuned to, if you find this article useful, share it please. Thank you.

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One comment on “Asset Allocation for Investors Age 65: Retirement Years

  1. Udaykumar Gandhi says:

    Thanks for the information. It is good article for reference , but when I try to see investment like if I have 1 million than
    I need to invest 100 000 in cash like all in details
    But my question is how I considered 100 000
    It suppose to be valued on 1/1/2017
    In all cases
    Means mutual fund value 100 000 it is supposed to be marketed value or investment value .
    There too many short and medium fund
    Can u put the big Jenuen fund name

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