A strong retirement plan goes well beyond saving — it serves to protect what you’ve spent your life building. One of the most effective ways to achieve the peace of mind that comes with a secure retirement is through diversification. By spreading your investments across different asset classes, you can balance growth with security. It’s important to remember that diversification looks different at various stages of life.
Growing vs. protecting wealth
When you’re still working, your financial plan should focus on accumulating wealth. That means holding more growth-oriented assets like stocks.
For decades, many investors have relied on the traditional “60-40 portfolio,” which is made up of 60% stocks and 40% bonds. This diversified strategy has generated returns for many decades, and it still has a very solid track record today.
Depending on your goals and risk tolerance, you may work with your advisor to design a more aggressive mix tilted toward equities, but the guiding principle remains the same: build wealth for the future.
How diversification changes as you approach retirement
Retirement brings a shift in priorities. Instead of focusing on accumulating more wealth, you can begin to focus on maintaining your wealth.
Diversification helps you achieve these new goals. As you move through retirement, your portfolio allocation may gradually shift. Here’s an example of what that change might look like:
● Age 60–69: Moderate approach — 60% stocks, 35% bonds, 5% cash
● Age 70–79: Moderately conservative approach — 40% stocks, 50% bonds, 10% cash
● Age 80 and above: Conservative approach — 20% stocks, 50% bonds, 30% cash
While the specific portfolio weights may change based on your own plans and goals, this diversification approach is designed to reduce volatility, while keeping enough growth exposure to help your portfolio last through your retirement.
Annuities — a source of diversification beyond investments
When you’re retired and more of your wealth is tied up in investments, you can be more susceptible to market downturns. Diversification of your assets beyond securities can serve as another layer of protection, ensuring you have enough income to maintain your lifestyle in retirement.
Annuities are a powerful tool to help achieve this protection. By purchasing an annuity, you secure guaranteed monthly income for life, supplementing Social Security and other retirement benefits. This steady income stream helps insulate your lifestyle from market swings, offering peace of mind when volatility strikes.
Life changes. Your financial plan should, too
Financial planning is all about having the right strategy for the right time. Early in your career, growth should be your priority. As you approach and enter retirement, diversification becomes your shield — helping preserve your wealth, generate income, and provide stability in uncertain markets.
We specialize in helping individuals design retirement strategies tailored to their goals. Our focus is on building diversified portfolios that aren’t overly reliant on any single income source, because diversification is protection. Get in touch with our team today to learn more about our comprehensive and strategic approach to retirement planning.