Approaching 55—Here’s How to Revamp Your 401(k) Now

23 hours ago 3

Joel South

Wed, December 10, 2025 astatine 9:59 AM CST 5 min read

A communal line for 55-year-olds suggests allocating 55% to stocks and 45% to bonds.
The 4% withdrawal regularisation assumes a portfolio tin prolong 4% yearly withdrawals for 30 years.
Target-date funds automatically set allocations and go much blimpish arsenic status nears.
If you’re reasoning astir retiring oregon cognize idiosyncratic who is, determination are 3 speedy questions causing galore Americans to recognize they tin discontinue earlier than expected. instrumentality 5 minutes to learn much here

As status nears and the commencement of 2026 close astir the corner, reallocating a 401(k) becomes captious to equilibrium growth, income, and risk, ensuring savings past done decades of beingness aft work. In their 50s, galore investors, similar a caller Redditor connected the r/PersonalFinance subreddit, question to displacement from assertive redeeming to a strategy that protects their nest ovum portion supporting a sustainable 4% withdrawal rate.

The Redditor, aged 55, asked for harmless options to set their 401(k) arsenic they attack retirement, expressing a tendency to trim hazard portion maintaining maturation to money distributions. He was unsure whether to permission funds untouched, research annuities, oregon reallocate.

I'm not a fiscal planner oregon taxation professional, truthful these are conscionable my opinions, but I'll springiness immoderate tips connected how, successful your 50s, you should absorption connected hazard assessment, blimpish investments, and nonrecreational guidance to unafraid a comfy retirement.

An infographic from 24/7 Wall St. guiding investors connected reallocating their 401(k) successful their 50s. It features pastry charts showing plus allocation changes, a ocular standard balancing portfolio maturation against withdrawal risks, a graph illustrating a Target-Date Fund glide path, and a database of cardinal steps for a unafraid fiscal transition.

At 55, hazard tolerance typically declines arsenic status looms, but the request for maturation persists to outpace inflation, projected by the Federal Reserve to tally astatine 2.6% annually successful 2026.

Start by evaluating your comfortableness with marketplace volatility. Can you tummy a 20% portfolio drop, arsenic we saw successful 2022’s carnivore market, oregon bash you similar stability? Consider your 401(k)’s size, different assets (e.g., location equity, IRAs), and expenses. If a 4% withdrawal complaint covers surviving costs -- for example, $40,000 per twelvemonth from a $1 cardinal portfolio -- a blimpish attack is viable. Otherwise, you volition inactive request to instrumentality immoderate risks.

Review your existent holdings, often stocks, communal funds, oregon exchange-traded funds (ETFs), to guarantee they align with your goals. For instance, a retiree needing $75,000 annually whitethorn necessitate a larger banal allocation to turn their portfolio and to equilibrium hazard with longevity.

Reallocating a 401(k) erstwhile you crook 55 should beryllium gradual to debar locking successful losses oregon missing growth. A communal line is to subtract your property from 110, suggesting a 55-year-old allocate 55% to stocks and 45% to bonds. Stocks, which person averaged 7% existent returns since 1928, thrust growth, portion bonds, yielding astir 4% today, supply stability.