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Retirement allocation is fundamentally different from accumulation allocation. You are no longer saving — you are spending. The portfolio needs to generate cash flow, weather market downturns without panic-selling, and last 25-35 years. The math changes everything.
| Asset class | % range | Role |
|---|---|---|
| Stocks (US + International) | 40-60% | Long-term growth, inflation hedge |
| Bonds (varied durations) | 30-45% | Stability, income |
| Cash + short-term Treasuries | 5-15% | Withdrawals for next 1-3 years |
| Alternatives (REITs, gold) | 0-10% | Inflation protection |
The exact mix depends on three factors: your other guaranteed income (Social Security, pension), your withdrawal rate, and your tolerance for portfolio volatility.
Enter your holdings and see your portfolio as a pie chart.
Open Portfolio Visualizer →Some retirees structure their portfolio explicitly around generating income, not just appreciation:
| Component | % | Yield | Annual income (on $1M) |
|---|---|---|---|
| Treasury bonds (BND) | 25% | ~4.5% | $11,250 |
| Corporate bonds (LQD) | 10% | ~5.0% | $5,000 |
| Dividend stocks (SCHD) | 15% | ~3.5% | $5,250 |
| Total US stocks (VTI) | 25% | ~1.4% | $3,500 |
| International (VXUS) | 10% | ~3.0% | $3,000 |
| REITs (VNQ) | 10% | ~4.0% | $4,000 |
| Cash (HYSA) | 5% | ~4.5% | $2,250 |
| Total | 100% | ~3.4% blended | $34,250 |
A $1M income-focused portfolio could realistically generate $30K-$40K per year in dividends and interest before any capital appreciation. Combined with average Social Security ($25K-$40K), that supports a $55K-$80K lifestyle without selling any shares.
The instinct in retirement is to flee to "safe" assets — bonds, CDs, cash. But over 30 years, those struggle with inflation. Stocks are the only asset class that has reliably beaten inflation over multi-decade periods.
| Allocation | Inflation-adjusted return (long-term) | Likely outcome over 30 years |
|---|---|---|
| 100% cash | ~0% | Lose 50%+ purchasing power |
| 100% bonds | ~2% | Slight purchasing power gain |
| 50/50 stocks/bonds | ~4-5% | Comfortable real growth |
| 100% stocks | ~7% | Strong real growth, with volatility |
A retiree at 100% bonds is "safe" from short-term swings but slowly losing purchasing power. Most retirees should hold at least 40-60% in stocks even in retirement.
Enter your holdings and see your portfolio as a pie chart.
Open Portfolio Visualizer →The bucket strategy divides your portfolio by time horizon:
This is what you spend from. It is immune to market crashes.
This refills Bucket 1 each year. It has some volatility but limited downside.
This is the growth engine. You leave it alone in down markets and refill Bucket 2 from it during good market years.
| Bucket | Holdings | Amount | % |
|---|---|---|---|
| Bucket 1 (Cash) | HYSA + BIL | $80,000 | 8% |
| Bucket 2 (Intermediate bonds) | BND + LQD | $320,000 | 32% |
| Bucket 3 (Growth) | VTI + VXUS + VNQ + SCHD | $600,000 | 60% |
| Total | — | $1,000,000 | 100% |
This retiree has nearly 8 years of expenses in safer assets (bucket 1 + 2 vs $50K annual expenses) before they would have to touch growth assets in a downturn. That eliminates most sequence-of-returns risk.
Retirees with multiple account types should generally draw in this order:
This ordering minimizes lifetime taxes for most retirees. Talk to a tax pro for your specific situation.
Use the portfolio visualizer to chart your current allocation. A typical retiree pie chart should show meaningful slices of stocks, bonds, and cash — not just one or two. If you are 100% in any single category, you are taking on a specific risk (inflation if all bonds, volatility if all stocks).
The right retiree allocation is the one that lets you sleep at night AND last 30 years. Both halves matter equally.