Needs change over time, and the investment mix that worked in your 20s might not be ideal as you get older. But one thing is clear from 401(k) plan data: Investors of all ages are increasing bets on the stock market compared to the way Americans invested for retirement in previous decades.
Investing experts say younger investors should be more aggressive, while older investors should be more conservative — to a degree — and it's a message that has been effectively delivered. A big reason why: The ubiquity of target-date funds — designed around expected retirement age — in 401(k) plans, and in which weighting to stock and bonds are set by the fund company.
Vanguard's most recent How America Saves report, which uses figures from 3.9 million defined contribution plan participants, showed investors younger than 25 had an average of 88 percent of their defined contribution assets allocated to equity. Equity exposure dropped to 75 percent for those age 45 to 49, and 50 percent for 65- to 69-year-olds. Vanguard target-date funds have more than $500 billion in assets.