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A lot of personal finance advice is about saving for retirement. But the need for saving and investing doesn’t stop once you’re done working; seniors also need to maintain a sound investment strategy during retirement.
Retirees face several challenges that make investing after 65 necessary, including preserving safe income streams, outpacing inflation, and avoiding the risk of running out of money. Here are some tips seniors may consider as they choose the right path for investing after retirement.
Key Points
• Assessing income sources and budgeting is crucial for retirees to manage financial changes without a steady paycheck.
• Tracking down forgotten 401(k)s can recover significant unclaimed funds.
• Understanding time horizon and risk tolerance is essential for choosing suitable investments.
• Diversification across various asset classes might help mitigate risks associated with specific investments.
• Regular portfolio rebalancing may help align with changing financial goals and market conditions.
1. Assess Income Sources and Budget
Once in retirement, seniors likely don’t have an income stream from a steady paycheck. Instead, retirees typically utilize a mix of sources to pay the bills, such as Social Security, withdrawals from retirement, savings, and online brokerage accounts, and perhaps passive sources of income such as rental properties. This change, going from relying on a regular salary to relying on savings and investments to fund a particular lifestyle, can be daunting.
Retirees should first understand where their income is coming from and how much is coming in to help navigate this financial change. This initial step can help establish a budget that allows them to comfortably cover typical retirement expenses and map out discretionary spending or new investments in their golden years.
2. Track Down Forgotten 401(k)s and Other Lost Money
If you changed jobs during your career, it’s possible that you left an old 401(k) plan behind. As of July 2025, there were 31.9 million forgotten or left-behind 401(k) accounts, according to estimates by Capitalize, a company that helps with 401(k) rollovers, and the Center for Retirement Research. These forgotten accounts hold about $2.1 trillion in assets.
To determine if you have a forgotten 401(k), make a list of every company you worked for and where you participated in a 401(k) plan. Contact them to see if they still have an account in your name. If a company no longer exists, or if it merged with another company, check with the U.S. Department of Labor (DOL). Visit the DOL’s Lost and Found Retirement Savings Database website, where you can track down your former company’s Form 5500, which is required to be filed annually for employee benefit plans. That should give you contact information you can reach out to or at least tell you who your 401(k) plan’s administrator was.
If you still can’t find a forgotten 401(k), you could try the National Registry of Unclaimed Retirement Benefits. Be aware that you’ll need to supply your Social Security number to search on their website.
Another option is to check the website for the National Association of Unclaimed Property Administrators, which may be able to help you find unclaimed funds, including an old 401(k). Check under every state that you’ve lived and worked in. If and when you find an old 401(k), you can roll it over into an IRA.
If you don’t yet have one, you can set up an IRA online. Then you can invest the money as you see fit.
3. Understand Time Horizon and Risk
Considering investment time horizon and risk in post-retirement investment plans is essential. Time horizon is the amount of time an individual has to invest before reaching a financial goal or needing the investment earnings for living expenses.
Time horizon significantly affects risk tolerance, which is the balance an individual is willing to strike between risk and reward. Generally speaking, seniors with a time horizon of a decade or more might choose to invest in riskier assets, such as stocks, because they feel they may have time to possibly ride out any short-term downturns in the market. Individuals with a short time horizon of just a few years may stick to more conservative investments, such as bonds, where they could potentially benefit from capital preservation and interest income.
4. Consider Diversification
Portfolio diversification involves spreading out investment across different asset classes, such as stocks, bonds, real estate, and cash. Diversification also involves spreading investments out among factors such as sector, size, and geography within each asset class.
It is important to take diversification into consideration before and after retirement. Diversification may help investors potentially avoid the risk and volatility unique to one specific type of investment, although there is still risk involved. Concentrating a portfolio with any one asset may increase volatility during a period when retirees want a low risk tolerance.
5. Rebalance Regularly
A retiree’s financial goals, risk tolerance, and time horizon generally affect the desired asset allocation in an investment portfolio. However, those initial goals and risk considerations can change during a retiree’s golden years.
Additionally, since the market is constantly in flux, potentially shifting the proportions of assets a person holds, it may make sense to rebalance the assets inside a portfolio regularly.
Rebalancing a portfolio may be thought of like the routine upkeep of your investments. For example, if a portfolio has an asset allocation of 70% bonds and 30% stocks and the stocks do well during a year, they might make up a higher percentage of a portfolio than planned. By the end of the year, the asset allocation may be 65% bonds and 35% stocks.
In that case, the investor may want to rebalance by selling stock and buying more conservative assets, such as bonds, to ensure the portfolio’s asset allocation is in line with their goals.
6. Keep an Eye on Inflation
Retirees living on a fixed income can be negatively affected by rising inflation. As prices increase, the fixed income that an individual relies on will be worth less the following year. For example, if an individual receives $1,000 a month in a fixed income and inflation rises by a 4% annual rate, then that $1,000 monthly income will be worth $960 in today’s money.
Investments that pay out a fixed interest rate, such as bonds, are most vulnerable to inflation risk as inflation may outpace the earned interest rate. Some other assets are more likely to outpace inflation, such as stocks or inflation-protected securities.
Smart Investment Options for Retirees
Retirees have a lot of choices when it comes to making new investments. But their financial goals, age, and risk tolerance can impact which investments they choose to make. With those factors in mind, here are a few investments seniors in retirement may want to consider.
Cash
Cash is the most stable way to hold money, and it is a necessary part of a retiree’s financial portfolio. Keeping cash on hand can help cover necessities like housing, utilities, food, and clothes.
Retirees could put a portion of their cash in a money market account or a high-yield savings account to earn interest while having easy access to their cash. However, the interest paid out in typical savings or checking accounts tends to be quite low and may not beat the inflation rate. That means the money in these accounts may slowly lose its value over time.
By comparison, some high-yield savings accounts have an annual percentage rate (APY) of up to 4.00%, compared to the 0.38% national average savings account rate.
Bonds
Bonds generally don’t offer the same potential for high returns as stocks and other assets, but they may have advantages for investing after retirement. Bonds typically pay interest regularly, such as twice a year, which may provide investors with a predictable income desired in retirement. Also, if investors hold a bond to maturity, they typically get back their entire principal, which can help preserve their savings while investing.
However, it’s important to be aware that while bonds are considered by investors to be a less risky investment, it’s still possible to lose money investing in them. For instance, a bond issuer may fail to make interest payments and default on the bond. Retirees should be aware of the risks involved when considering bonds.
Various types of bonds may help investors preserve capital and realize interest income during retirement, including relatively safe U.S. Treasuries. Additionally, Treasury-Inflation Protected Securities (TIPS) are bonds that hedge against inflation, which can be helpful for retirees worried about rising prices.
Stocks
Stocks are considered a risky investment; they tend to be more volatile than more conservative assets like bonds or certificates of deposit. Though investing in stocks may potentially lead to significant returns, it also means there is the potential for big losses. However, there may be value in investing in stocks for some seniors.
For example, stock investments may help a portfolio experience capital gains that outpace inflation. It may not make sense for older investors to chase returns from higher risk stocks like tech start-ups. Instead, retirees may want to look for proven companies whose stocks generally offer steadier growth. Retirees might also wish to consider investing in companies that provide stable dividend payouts that generate a regular income source.
Certificates of Deposit
Certificates of deposit, otherwise known as CDs, are low-risk investments that may offer higher interest rates than typical savings accounts. Investors put their money in a CD and choose a term, or length of time, that the bank will hold their money. The typical term length is anywhere from three months to five years, and during this period, the investor can’t touch the money until the term is up. Once the term is over, the investor gets the principal back, plus interest. Typically, the longer the investor’s money is in the account, the more interest the bank will pay.
Fixed Annuities
Fixed annuities may provide retirees with a regular income, bolster the gains from other investments, and supplement savings. In short, an annuity is a contract with an insurance company. The buyer pays into the annuity for a certain number of years, and the insurance company pays back the money in monthly payments.
The Takeaway
It’s never too early to start investing for retirement. But the need for a sound investing strategy doesn’t stop once an individual reaches retirement. You need to ensure that your savings and investments are working for you throughout your golden years.
One step that could help retirees manage their retirement savings is doing a 401(k) rollover, where they move funds from an old account to a rollover IRA. It’s possible to search for a lost or forgotten 401(k) from a previous employer to roll over into an IRA.
Prepare for your retirement with an individual retirement account (IRA). It’s easy to get started when you open a traditional or Roth IRA with SoFi. Whether you prefer a hands-on self-directed IRA through SoFi Securities or an automated robo IRA with SoFi Wealth, you can build a portfolio to help support your long-term goals while gaining access to tax-advantaged savings strategies.
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FAQ
What is the best investment strategy for retirees?
While the best investment strategy for retirees depends on an individual’s unique circumstances and financial needs, a balanced plan that combines generating a steady stream of income, outpacing inflation to protect purchasing power, and having a supply of cash for short-term needs is one that retirees may want to explore.
What is the number-one mistake retirees make?
The number-one mistake many retirees make is not having a strategic and comprehensive retirement plan in place. This may cause them to put off saving for retirement, underestimate how much money they will need, and claim Social Security benefits too early (for example at age 62 rather than at full retirement age, which results in a lower monthly amount). Having a retirement plan in place and reviewing it regularly to ensure that it still aligns with the individual’s needs and goals is essential.
What is considered a good retirement nest egg?
Saving at least 10 times your annual income by age 67 is generally considered a good retirement nest egg, according to an estimation by Fidelity. Benchmarks to potentially help reach that goal include saving 1x your salary by age 30, 3x your salary by 40, 6x by 50, 8x by 60, and 10x by age 67. While these are simply guidelines, having some specific numbers to work with may help you come up with a plan that fits your specific retirement goals and lifestyle.
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