At 75, this couple carries $1.5 million invested in the stock market alongside $425,000 spread across CDs and a savings account.
Both spouses collect Social Security, she receives a pension, and he continues to work while earning 80% of his salary upon retirement.
The couple is entirely debt-free and she holds a long-term-care insurance policy, giving them an unusually strong financial foundation heading into their later retirement years.
Their cash position represents roughly 22% of their total investable assets, well above what most financial advisers recommend for retirees at their stage of life.
Financial advisers typically suggest holding between 2% and 10% of net worth in cash, enough to cover unexpected costs without forcing early withdrawals from investment accounts during market downturns.
Their savings are currently earning around 4% interest, which barely outpaces the 3.3% inflation rate and leaves significant potential returns sitting on the table.
The S&P 500 has historically averaged a 10% annual return over the last century, adjusting for bull markets, recessions, corrections, and crashes across that span.
However, at 75, avoiding forced withdrawals from investments during a down market takes priority over chasing historical stock market averages.
Because this couple can amply cover living expenses through Social Security, pensions, and a working spouse’s salary, they could likely afford greater exposure to equities than conventional guidance suggests.
The very fact that they asked the question suggests they may carry a higher risk tolerance, possibly comfortable with 50% or more of their portfolio held in stocks.
For retirees in their 70s with no mortgage, no debt, and multiple guaranteed income streams, keeping one to two years of expenses in cash is generally considered sufficient.
If their $1.5 million in stocks sits inside tax-advantaged IRAs or 401(k) accounts, required minimum distributions would have begun at age 73 under current IRS rules.
Using the IRS Uniform Lifetime Table distribution factor of roughly 24.6 for age 75, their annual required minimum distributions would come to nearly $61,000 per year.
That RMD calculation is based on an account balance as of December 31, 2025, divided by the applicable IRS distribution period for their age.
The size of their cash position is not a crisis, but the combination of their income security and long-term-care coverage suggests there may be meaningful room for strategic adjustment.
