Too old to take risks… or too young for your money to stop growing?
It’s natural to seek financial security as we get older. And it’s true you don’t manage a portfolio at 70 the same way you do at 35. But believing that you must eliminate all risk once retired is a mistake that could endanger the longevity of your capital.
The real question isn’t, “Am I too old to take risks?”
The real question is, “Will my investments be enough to cover 20, 25, or even 30 years of retirement?”
1. Life Expectancy Is Increasing… and So Is the Risk of Outliving Your Savings
According to Retraite Québec, a 65-year-old man has a 50% chance of living to age 84, and a woman to age 87. But 1 in 4 retirees will live beyond age 90.
This means your portfolio must be able to:
-
withstand 30 years of withdrawals,
-
continue generating returns after you retire,
-
maintain purchasing power in the face of inflation.
👉 If all your money is invested in ultra-safe products (e.g., GICs or savings accounts), you risk losing real value over time.
2. The main risk isn’t the market… it’s silent inflation.
Many retirees believe their capital is “safe” by avoiding the markets. Yet inflation is a silent thief.
-
A cost of living increase of 2.5% per year cuts your purchasing power in half in 28 years.
-
If your portfolio generates 2% net, you lose ground every year.
-
Result: you will have to dip further into your capital to maintain your standard of living.
What seems prudent in the short term becomes risky in the long term.
Risk is not binary (risky / not risky). It is gradual and must be personalized:
-
At age 70, if you are in good health and have few immediate needs, your investment horizon can still be 15 to 20 years.
-
This means that you must continue to grow a portion of your assets; otherwise, you will see them erode over time.
Example: a portfolio of 60% bonds and 40% stocks can offer both stability and growth while avoiding extreme volatility.
A common mistake is believing that retirement marks the end of investing. In reality, most people don’t use up all their capital at once. They:
- withdraw gradual amounts each year,
- let the remaining funds continue to grow,
- adjust their withdrawals based on market conditions.
This strategy known as “dynamic withdrawal” still requires a minimum level of return, and therefore a controlled level of risk.
A good financial planner won’t tell you to “put everything in the stock market” at 75. But they will help you to:
-
identify your comfort level (risk tolerance),
-
allocate your assets according to your time horizon (short, medium, and long term),
-
create a stable retirement income without sacrificing future growth.
-
1 year of expenses in a savings account (zero risk)
-
4 to 5 years of income in bonds or low-risk investments
-
The rest in diversified investments to generate long-term returns
The result: you can sleep soundly without compromising your financial future.
There’s no age limit to investing wisely.
Wanting to make everything “safe” after a certain age may seem prudent, but it exposes you to another danger seeing your money run out too quickly.
The goal isn’t to “take risks” recklessly, but to manage the right level of risk for your situation.
A well-balanced portfolio is far better than a savings account that slowly melts away.
-
Retirement Québec, Life Expectancy 2024
-
IQPF, Retirement Withdrawals, 2023
-
Institute for Retirement and Savings, HEC Montréal
-
Morningstar, Impact of Inflation on Retirement Portfolios, 2022
