Investing in your 60s: Smart portfolio moves for lasting returns

Financial planning for your 60s and beyond

This is a time where the saving phase is largely complete, and attention pivots to how income, withdrawals, and obligations fit together.

The following structure may help keep every part of your finances aligned:

Coordinate income and withdrawals

Combine pensions, investment income, and any part-time work into a single plan. Identify when each stream begins and how taxation applies. Sequencing withdrawals from taxable accounts, pension wrappers (tax-deferred in some countries), and tax-free accounts (e.g., ISAs where applicable) can help you preserve both income stability and long-term growth.

Reassess liabilities and discretionary spending

Evaluate outstanding debt, ongoing commitments, and flexible expenses. If repayments strain your monthly budget, weigh consolidation or refinancing options. Map essential versus optional spending so portfolio withdrawals match your real needs.

Build reserves for healthcare and longevity

Healthcare and long-term care costs typically accelerate from this decade onward. Create a dedicated reserve or review existing insurance coverage (availability and scope vary by country) so that medical expenses don’t disrupt your investment plan. Adjust your projections for longer lifespans to avoid underfunding late-stage years.

Simplify and automate account management

Streamline multiple accounts or workplace pensions where appropriate, checking for guaranteed benefits, exit fees, and tax consequences before transferring. Fewer accounts mean easier oversight, lower fees, and smoother withdrawals. Automating transfers and recurring payments reduces the chance of errors or missed distributions.

Maintain control through updated legal documents

Ensure wills, powers of attorney, and beneficiary records reflect your current circumstances. Keeping documentation up-to-date avoids administrative complications and keeps decision-making in your hands.

Once your income structure, obligations, and documents are in sync, every investment you make can serve its distinct role.

Investment strategies for your 60s

In your 60s, your goal is to turn years of accumulated capital into a structure that produces steady income, manages inflation, and preserves flexibility.

The following strategies support that purpose in different ways:

Income layering

Build your income in layers, starting with what’s guaranteed (like pensions or annuities), and adding investment income from dividends or bonds on top. When your core expenses are already covered by stable sources, you don’t have to sell investments during market downturns. That’s a simple way to keep your cash flow more predictable.

Bond laddering

Holding bonds that mature in consecutive years can help provide more stable income and reduce sensitivity to interest-rate changes. As older bonds mature, the proceeds can be reinvested at new rates or used for living expenses. That keeps the fixed-income portion of your portfolio responsive rather than static.

Inflation-linked investing

At this stage, inflation risk is as critical as market risk. So, allocating part of your portfolio to inflation-protected bonds or funds that adjust with price levels can help your purchasing power keep pace with inflation. However, values and payouts can still vary.

Partial annuitisation

Consider using a portion of your savings to purchase an annuity that provides a contractually guaranteed lifetime income, subject to the provider’s terms and financial strength. This can help cover essential costs, independent of market performance, but features, rates and guarantees vary by provider. Keeping the remaining savings invested can help your capital continue to grow and give you flexibility for future spending.

Tax-efficient withdrawals

The sequence of withdrawals can make a significant difference to the longevity of your capital. The optimal withdrawal order varies by jurisdiction and circumstances; tax thresholds, allowances and benefits often determine whether drawing first from taxable accounts helps, or whether a blended approach is more efficient.

Legacy alignment

If passing wealth to family or funding philanthropy is part of your plan, keep a defined share of assets in growth-oriented investments where appropriate, while recognising that higher expected returns come with higher risk and volatility. This preserves long-term value, while income-producing assets can fund your day-to-day expenses.

What an investment portfolio for 60-year-olds can include

A portfolio in your 60s should aim to generate income you can rely on, keep some growth to counter inflation, and remain simple to manage.

The following investment options can support those goals:

Dividend-focused equity funds and ETFs

Equities can still provide long-term resilience, but it’s essential to be selective. Dividend-growth or dividend-income funds focusing on profitable, mature companies can help you maintain your purchasing power while delivering steady cash flow. Your exposure should be moderate to limit volatility.

Short- and intermediate-term bond ETFs

High-quality bond ETFs or managed bond funds that invest in government and investment-grade corporate debt offer stability and predictable income. Staggering maturities over several years (a short bond ladder) provides flexibility to reinvest at prevailing rates.

Inflation-linked bonds

Allocating part of your fixed-income portfolio to inflation-protected government bonds, such as index-linked gilts (UK) or TIPS (US), may help you preserve real returns over multi-decade retirements. These instruments adjust principal and interest payments with inflation, protecting purchasing power.

High-yield savings and money-market funds

Holding one to three years of essential expenses in high-interest savings accounts (typically deposit-protected, subject to scheme limits) or money-market funds (investments that can fluctuate and may apply liquidity fees or gates) may help maintain liquidity and reduce the need to sell long-term investments during market downturns. These options can help you keep a part of your capital accessible while earning modest, low-risk returns.

Listed infrastructure and REIT funds

Exposure to listed infrastructure or real-estate investment trusts (REITs) introduces alternative income streams tied to physical assets. These assets are valued for steady cash flows tied to real-world contracts or rents rather than capital appreciation.

How to start investing after 60

If you want to start investing in your 60s, focused decisions and caution are required. Your aim now should be to strengthen your long-term security, not to make up for any missed opportunities.

The following approaches can help you begin safely and effectively:

Decide on your objectives

Clarify what your investments should achieve: steady income, growth for later years, or assets to leave behind. The goal determines your time horizon and acceptable risk level.

Begin gradually

Introduce market exposure over months (a dollar-cost-averaging approach) instead of investing a lump sum. Regular contributions reduce timing risk and help you adjust comfortably to market movements.

Prioritise diversification and low costs

Balanced portfolios or broad ETFs give exposure to multiple asset classes without complexity. Focus on transparent products with low or modest fees to ensure you keep most of your returns.

Maintain a liquidity reserve

Keep enough in cash or near-cash accounts to cover near-term expenses and emergencies. This buffer gives you flexibility and helps you avoid selling investments during market downturns.

Review and adjust periodically

Check your progress a couple of times per year and update your allocations if your income, risk tolerance, or health situation changes. Small, regular refinements are more effective than large shifts.

Common mistakes to avoid when investing in your 60s

At this stage of your life, you need a disciplined approach to protect your income, manage risk, and maintain confidence in your plan.

These are the mistakes that can quietly undermine that balance:

Abandoning growth completely

While moving everything into cash or short-term bonds might feel safe, it exposes your savings to inflation. Even modest price increases can erode spending power over two or three decades. Keeping a moderate share of equities (focused on quality and dividends) can help your portfolio stay productive without taking excessive risk.

Setting fixed withdrawals without review

Many investors in their 60s choose a withdrawal rate and never revisit it. Markets fluctuate, spending patterns shift, and inflation changes the real value of income. Review your withdrawal plan annually to ensure it continues to align with your needs and portfolio performance.

Overlooking coordination between income sources

Most people in their 60s begin drawing from multiple sources: pensions, annuities, dividends, and investment accounts. If these are not coordinated, you could face cash-flow gaps or unnecessary taxes. Create a calendar that outlines when each stream begins and how taxation applies, ensuring your income remains steady throughout the year.

Letting financial complexity pile up

Over decades, accounts multiply: old pensions, small investment plans, multiple savings products. Managing them separately can create confusion, missed payments, or duplicated fees. Consolidating your accounts where possible keeps your costs lower and makes it easier to monitor your performance and withdrawals.

Not preparing for mandatory withdrawals and tax thresholds

Many systems require minimum withdrawals from certain retirement accounts after a specified age (often in the 70s), but ages and rules vary by country. Planning in your 60s allows you to manage these withdrawals gradually, thus reducing future tax spikes and avoiding forced sales during market downturns.

Conclusion: Protecting your growth with intention

In your 60s, the priority is coordinating withdrawals and investments with your timeframe and income needs, and managing what you’ve saved so it continues to support your long-term goals. With a clear income plan and budget, an allocation that balances stability with measured growth, and a cash reserve for near-term spending, you create room to make considered decisions rather than react to short-term market moves.

Stay focused on what you can control: how you pace withdrawals, how you manage risk, how you structure income in a tax-aware way, and how you plan for healthcare and longevity. Taken together, these steps can help you navigate the transition into retirement with greater clarity and flexibility, keeping decisions on your terms.