What Investing in Your 70s Really Means for Your Portfolio

Investing in your 70s demands a different set of priorities than at any earlier stage: income, capital preservation and genuine diversification matter far more than chasing growth. Retirement may already be under way, or close to it, and the calculus around risk changes once a salary stops arriving.

‘While your working life may be coming to an end, your investing runway still has decades left to run, so don’t ever feel like you’ve been aged out of investing,’ said Darius McDermott, managing director at Chelsea Financial Services. ‘When you’re relying on your portfolio for income, capital preservation and diversification have never mattered more.’

The Risk Question When Investing in Your 70s

Younger investors can ride out a sharp market correction and wait for a recovery that may take years. At 70 or 75, a steep portfolio drawdown can permanently impair retirement income. Managing that downside is the first job.

One rule of thumb is to subtract your age from 100, allocate that percentage to equities and put the rest into lower-risk assets. A 75-year-old would therefore hold 25% in equities and 75% in steadier holdings. The formula is imprecise, but it captures the right direction of travel.

Bonds are the traditional filler for that defensive bucket, but the correlation between bond markets and equity markets has tightened in recent years, meaning both can fall together. A broader interpretation of ‘lower risk’ might include commodities, defensive equities, wealth-preservation funds, money-market funds or cash. Top savings accounts currently offer up to 5%, though that rate is not guaranteed to persist.

‘As inflation stays elevated, the cost of keeping your hard-earned savings in cash only grows, and while interest rates look attractive today, it would be unwise to bet your entire retirement income on them staying that way,’ said McDermott.

Equities Still Have a Role: Dividends Versus Coupons

Abandoning stocks entirely in your 70s is not necessarily the right move. The distinction between equity income and fixed income matters here. James Lowen, co-portfolio manager of J O Hambro UK Equity Income, makes the point plainly: ‘In fixed income coupons are flat; they don’t grow.’ Dividends, by contrast, tend to rise over time, which provides a natural hedge against inflation eroding real returns.

‘When choosing between equities and fixed income, [it’s important] to understand one grows, one is flat in nominal terms,’ said Lowen. His fund is forecast to yield 4.15% in 2026 and has delivered a 9% compound annual dividend growth rate over the 21 years since inception, which would imply a yield of 29% on the original unit price based on 2025 figures.

Defensive sectors — consumer staples, healthcare, utilities and infrastructure — sit in similar territory. Companies in these areas tend to generate predictable, inflation-linked revenues regardless of where the business cycle stands. McDermott highlighted First Sentier Global Listed Infrastructure as one way to access toll roads and utilities with income that tends to move in line with inflation.

Valuation discipline reinforces all of this. ‘When you buy a stock, your starting valuation has a big determinant of what you ultimately make,’ said Lowen. Buying at lower multiples limits the downside and leaves room for gains; buying at stretched prices removes that cushion. ‘If you pay a full price, where’s your upside?’ he added.

Two Investment Trusts Worth Examining Closely

City of London Investment Trust (LON:CTY) has now achieved 60 consecutive years of dividend growth, making it the first UK investment trust to reach that milestone, according to the Janus Henderson issuer page. The most recent annual increase was 3.4%, lifting the dividend to 21.3p per share, fully covered by earnings. Performance has also been strong: in the year to the end of June 2025, CTY delivered a share price return of 21.8%, against 11.2% for the FTSE All-Share. Over the 12 months to 12 March 2026, Kepler Trust Intelligence confirms NAV and share price total returns of 25.9% and 28.3% respectively, with NatWest Group and Phoenix Group among the higher-conviction positions. The trust has been managed by Job Curtis since 1991.

Capital Gearing Trust (LON:CGT) takes a different approach, targeting capital preservation above all else. It has delivered a positive return in 42 of the past 44 years. Its May 2026 factsheet shows 23% allocated to risk assets and 48% to inflation-linked bonds, with an ongoing charge of 0.58% and no performance fee. The trust’s 2026 annual report shows the NAV return outpaced inflation by 2.5% in the most recent reporting period.

McDermott also names absolute return funds (Janus Henderson Absolute Return and SVS RM Defensive Capital), multi-asset options (Orbis Global Cautious and Jupiter Merlin Income Portfolio) and bond funds (TwentyFour Dynamic Bond and Artemis Global High Yield Bond) as further options for investors managing volatility in later life.

The next test for this kind of portfolio comes whenever rate expectations shift sharply: that is the moment when bond correlations, gold’s defensive credentials, and the yield cushion on income equities all face simultaneous pressure at once.