Americans have a long history with lists. Long before the emergence of top 10 countdowns and internet rankings, the Founding Fathers drafted one of the era’s most consequential lists: 27 grievances against King George III outlined in the Declaration of Independence.
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Now, 250 years later, retirees face a different challenge — not declaring independence from a king, but rather maintaining financial freedom throughout a lengthy retirement that can last 30 years or more. These 10 investment strategies can help:
1. Maintain a growth allocation.
2. Build a reliable income bucket.
3. Create a tax-efficient withdrawal strategy.
4. Diversify beyond U.S. large-cap stocks.
5. Use dividend-paying investments strategically.
6. Consider a bond ladder.
7. Add inflation hedges.
8. Explore alternative income sources.
9. Rebalance regularly.
10. Invest with longevity in mind.
1. Maintain a Growth Allocation
You worked hard to save well for retirement. Now, your investment portfolio needs to do much of the heavy lifting to produce enough income and growth to fund your lifestyle needs over the next three decades or more.
Morningstar’s “The State of Retirement Income: 2025” report suggests retirees hold between 30% and 50% in equities to maintain sustainability throughout retirement.
Roger Young, CFP and thought leadership director at T. Rowe Price, says, “For people in their 60s, we generally suggest a range of 45% to 65% in stocks. For older retirees, that range typically falls between 30% and 50%. Those ranges are intentionally broad to accommodate different investor preferences across a range of market environments.”
Nilay Gandhi, CFP and senior wealth advisor at Vanguard, says equities can help investors keep pace with inflation in retirement. Gandhi adds, “What has evolved is less about a dramatic shift in the perceived right equity range and more about how that allocation is framed and managed. Vanguard’s recent ‘Principles for Retirement Income’ emphasizes that portfolio decisions should be driven by balancing key risks — especially longevity, inflation and market volatility — rather than defaulting to a static allocation.”
Key question: How will my portfolio generate enough growth to maintain my purchasing power over the next 20 to 30 years?
2. Build a Reliable Income Bucket
The six most powerful words during a significant market downturn of 20% or more are “I’ve got a plan for that.”
A key strategy to reduce stress during such a period is to create an income bucket containing one to three years’ worth of anticipated withdrawals in cash, money market funds, Treasury bills or short-term bonds. By setting aside funds for near-term spending needs, retirees can avoid selling stocks during periods of market volatility and give their long-term investments time to recover.
Key question: Outside of stocks, how many years of living expenses could my current portfolio fund?
3. Create a Tax-Efficient Withdrawal Strategy
Retirement planning doesn’t end when you stop working. In many cases, the order in which you withdraw money from various accounts can have a meaningful impact on your lifetime tax bill.
Not all investment accounts are taxed equally. To help manage your tax bill in retirement, mitigate Medicare surcharges and potentially extend your portfolio’s longevity, consider withdrawing from your non-retirement accounts (e.g., bank deposits, taxable brokerage account) first, followed by your tax-deferred IRA or 401(k) balances, and finally your tax-favored Roth IRA.
A thoughtful withdrawal strategy can be just as valuable as an effective investment strategy. Young says, “If I could give a newly retired investor just one piece of advice, it would be this: Don’t ignore taxes. Your tax situation can be complex in retirement, so start planning early with a financial professional well-versed in tax-efficient retirement income strategies.”
Key question: How will my withdrawals impact my taxable circumstances this year?
4. Diversify Beyond U.S. Large-Cap Stocks
Many retirees own a substantial portion of their portfolios in broad-market index funds that are heavily concentrated in a handful of large technology companies. While these companies have delivered strong returns in recent years, concentration risk can increase vulnerability to market shifts.
Diversifying across asset classes, sectors, company sizes and geographic regions may help create a more resilient portfolio capable of weathering different economic environments.
For perspective, T. Rowe Price’s current five-year outlook for a variety of asset classes includes the following:
— Global equities: 6.8%
— Global equities (ex-U.S.): 7.6%
— U.S. investment-grade corporate bonds: 4.1%
— Real estate investment trusts: 6.7%
— Gold: 1.6%
— Private equity: 9.8%
Key question: How much total return do I need in retirement to sustain my financial plan, and what are my sources for that necessary growth?
5. Use Dividend-Paying Investments Strategically
Dividend-paying stocks and funds can provide a valuable source of retirement income while offering the potential for long-term growth. Still, retirees should avoid chasing the highest yields, which can sometimes signal financial distress or unsustainable payouts.
Instead, focus on high-quality companies with a history of growing dividends over time. A portfolio that combines income generation with capital appreciation can help support spending needs while preserving purchasing power.
Key question: Am I chasing yield at the expense of quality and long-term growth?
[Read: 7 Dividend Stocks to Buy and Hold Forever]
6. Consider a Bond Ladder
What a comeback story for bonds in recent years. Back in 2021, institutional expectations for core bond returns were quite subdued, at around the 2% mark. Eleven Fed rate hikes and six subsequent Fed cuts later, the outlook for bonds has changed.
For example, Northern Trust’s 10-year annualized return forecast for U.S. investment-grade bonds and U.S. high-yield bonds is now 5% and 5.5%, respectively. BlackRock’s current 10-year expected returns for fixed income are an annual average range of 4% to 5.6% for U.S. aggregate bonds, and 3.7% to 5.1% for global aggregate bonds.
Dave Grecsek, managing director of investment strategy and research at Aspiriant, adds, “In the current environment, we often see portfolios holding too much cash, mostly because investors have been scarred from the recent historical bond losses; however, the outlook for bonds has greatly improved and now cash is back to a negative expected real return.”
A bond ladder involves purchasing bonds with staggered maturity dates, allowing a portion of the portfolio to mature at regular intervals. This strategy can help manage interest-rate risk, provide a steady stream of cash flow and create flexibility as market conditions change. For retirees seeking greater clarity around future income needs, a bond ladder may offer a practical solution.
Key question: Would a bond ladder provide more predictable income than my current fixed-income strategy?
7. Add Inflation Hedges
Even modest inflation can significantly erode purchasing power over a lengthy retirement. A retiree who spends $60,000 annually today could need substantially more to maintain the same lifestyle two decades from now.
Incorporating investments that have historically performed well during inflationary periods — such as stocks, Treasury inflation-protected securities (TIPS), infrastructure investments and certain real estate assets — may help offset rising costs and preserve long-term financial security.
Cohen & Steers, for example, projects positive annualized returns over the next decade for TIPS (5.1%), infrastructure (7.6%) and real assets as a category (7.8%).
Key question: How is my portfolio positioned to keep pace with rising costs over the next two or three decades?
8. Explore Alternative Income Sources
Traditional stock-and-bond portfolios remain the foundation of most retirement plans, but some retirees may benefit from selective exposure to alternative investments. Depending on an investor’s goals and risk tolerance, assets such as private equity, private credit, private real estate or Delaware Statutory Trusts (DSTs) may provide additional income, diversification and reduced correlation to public markets.
While alternatives are not appropriate for every investor, they can serve as a useful complement to a well-diversified portfolio. For accredited investors who own real estate, DSTs — which offer investors the opportunity to own fractional interests in large commercial properties — can also help defer capital gains taxes through a 1031 exchange. DSTs carry meaningful trade-offs, however, including illiquidity, limited investor control over the underlying property, ongoing fees and the risk of principal loss. These factors should be weighed carefully alongside their tax benefits and with the guidance of a qualified advisor.
Key question: How might alternative investments improve my portfolio’s income, diversification or tax efficiency, and am I comfortable with their liquidity and risk trade-offs?
9. Rebalance Regularly
Once a portfolio is diversified and tax-aware, the work shifts from building to maintaining it. Over time, market performance can cause a portfolio’s asset allocation to drift away from its original target. A retiree who began with a moderately aggressive 60% stock allocation may find that allocation has grown significantly higher after a prolonged bull market, often well beyond the equity ranges discussed above in strategy No. 1.
Regular rebalancing helps maintain an investor’s intended risk profile by trimming positions that have grown disproportionately and reallocating proceeds to underrepresented asset classes. This disciplined approach can help retirees manage risk without attempting to time the market.
Key question: Has my portfolio become riskier than I intended because of recent market gains?
10. Invest With Longevity in Mind
Perhaps the greatest retirement risk isn’t a market correction — it’s outliving your money. Advances in healthcare and healthier lifestyles mean many retirees will spend decades in retirement, making longevity a key planning consideration.
Successful retirement investing requires balancing current income needs with the need for future growth. By planning for a retirement that could last well into your 90s, investors may be better positioned to maintain financial independence throughout their later years.
Key question: What happens to my retirement plan if I live to age 95 or older?
Your Declaration of Financial Independence
Just as the Founding Fathers drafted a roadmap for political independence nearly 250 years ago, retirees need a roadmap for financial independence that can endure for decades. No single investment strategy can eliminate every risk, but a thoughtful combination of growth, income, diversification and tax planning can help investors build a portfolio capable of supporting the life they’ve worked so hard to create.
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10 Strategies for Investing After Retirement originally appeared on usnews.com
Update 07/01/26: This story was previously published at an earlier date and has been updated with new information.
