The End of the Traditional 60-40 Portfolio: A Shift Due to Longevity Advances

May 10, 2025 - 02:38

The traditional 60-40 stock and bond portfolio, once a cornerstone of retirement planning, is no longer viable, according to financial planning expert Ric Edelman. He argues that the primary reason for this shift is not the bond market's performance, but rather significant advancements in human longevity. As people live longer, the need for a more dynamic approach to investing has become evident.

Edelman points out that the conventional model, which allocates 60% of investments to stocks and 40% to bonds, fails to account for the extended time frame individuals now face in retirement. With life expectancies increasing, retirees require strategies that not only preserve capital but also generate sustainable income over potentially decades.

This change calls for a re-evaluation of investment strategies, encouraging individuals to consider a broader range of assets and approaches. As retirement landscapes evolve, so too must the methods by which individuals secure their financial futures. The era of the 60-40 portfolio may be over, but it opens the door to innovative investment strategies tailored for a longer life.