If Your Advisor Said to Add Bonds at 65, They Were Right — in 1995. Here’s What That Advice Should Sound Like in 2026.

Over the past 30 years, the investing landscape for retirees has changed radically. The fundamental bases for portfolio allocation have required revision. While those allocation ratios have shifted considerably, the ETF boom has made the menu of options broader than ever before. For a tried and true equities ETF, Vanguard Total Stock Market ETF (NYSEARCA:VTI) still deserves serious consideration across many portfolios.

Times Like These

Rocker Dave Grohl is only 2 years away from joining those in their 60s requiring retirement portfolio consideration.

“It’s time like these you learn to live again” – Dave Grohl

In the latter part of the 20th century, the baby boomer generation began creating one of the largest retirement-age demographics in US history. Financial advisors, stockbrokers, fund managers, and accountants responded with a quiver of marketing arrows designed for quick reference in portfolio allocation and asset management.

One rule of thumb that became conventional wisdom at the time was the “equity percentage = 100 minus your age” formula. Under that formula, a 45-year-old would allocate 55% of a portfolio to equities and 45% to bonds (100 minus 45). The underlying premise was simple: as investors got older, it behooved them to shift more capital into safer, less volatile bonds for security.

Fast forward to 2026. Investors have navigated a dramatically different set of conditions since that formula took hold:

• The 2000 dot-com stock market recession.
• The 2008 subprime mortgage banking meltdown.
• The 2020 Covid-19 pandemic.
• The 2020–2024 inflation surge, with a cumulative total of 17.1% by 2023.
• The AI-powered surge of the S&P 500, fueled by the Magnificent 7 technology stocks.
• Medical advances that have lifted average US life expectancy from roughly 75.8 years in 1995 to 79.0 years in the most recent CDC data.
• The Trump administration’s One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, which introduced a new temporary $6,000 deduction for qualifying taxpayers age 65 and older, helping many seniors offset federal taxes on Social Security income through 2028.

In light of all those forces, financial professionals have had to revamp formulas and recommendations. A greater range of investment products, longer lifespans, persistent inflation, shifting tax codes at both the federal and state levels, and escalating medical costs have collectively pushed equity percentages higher for retiree portfolios. A few of the approaches advisors are now using:

• Some advisors have revised the formula’s base from 100 to 110 or even 120 to increase the equity allocation portion.
• Eschewing age-based math entirely, some advisors apply a fixed equity/bond ratio of 60/40 or 70/30 regardless of age.
• Many advisors tailor allocations individually, weighing tax bracket, Social Security benefits, medical insurance coverage, and other personal factors.

The sheer number of investment product choices can overwhelm even experienced investors. Thankfully, some ETFs have stood the test of time and remain solid performers. Among them, the Vanguard Total Stock Market ETF has served as both a reliable portfolio staple and a fallback when more speculative vehicles disappoint.

Vanguard Total Stock Market ETF

Vanguard is now the largest ETF issuer in the United States, having surpassed BlackRock in June 2026.

John Bogle of Vanguard is considered “the father of the index fund” and is often associated with popularizing equity/bond allocation thinking for individual investors. He was a vocal critic of ETFs and believed they would encourage harmful short-term trading. The irony is notable: since his passing, Vanguard has grown into the largest ETF issuer in the United States, surpassing BlackRock in June 2026 after a decades-long effort to close the gap.

Stock indexes are designed to cover a defined category of stocks and then calculate averages of various criteria to quantify that category. The Dow Jones Industrial Average covers 30 stocks. The S&P 500 covers 500. VTI uses the CRSP US Total Market Index as its benchmark, which is designed to include large-cap, micro-cap, and everything in between so as to represent the entire US corporate stock market in a single fund.

VTI holds approximately 3,484 different stocks and carries a very low 0.03% expense ratio. It launched on May 24, 2001.

VTI’s top 10 holdings (as of May/June 2026) are:

• NVIDIA – 6.70%
• Apple – 6.29%
• Microsoft – 4.60%
• Amazon – 3.59%
• Alphabet Class A – 3.04%
• Broadcom – 2.91%
• Alphabet Class C – 2.39%
• Meta Platforms Class A – 1.90%
• Tesla – 1.69%
• Micron Technology – 1.50%

VTI Flexibility

VTI is a good choice for retirement accounts subject to RMD.

Assuming the retiree is in reasonably good health and has at least a modest nest egg of savings, VTI can offer several strategic advantages worth considering:

• For retirees holding both traditional IRA and 401(k) accounts alongside Roth accounts, VTI’s strong long-term growth history makes it particularly well suited for overweighting in Roth IRA accounts, which grow tax-free.
• Taxable accounts can also benefit from VTI’s growth profile, since that growth can offset any potential principal reduction that results from Required Minimum Distribution (RMD) rules. Under the SECURE 2.0 Act, RMDs now begin at age 73 for most current retirees, rising to age 75 for those born in 1960 or later. The fund’s appreciation can also partially compensate for tax outlays in those accounts.
• When RMD requirements compel partial liquidation of holdings, selling VTI first may be preferable to selling higher-yielding bonds or more aggressively positioned growth funds. Retaining those positions may better serve the portfolio’s ongoing income and long-term expansion goals.

One additional planning consideration worth noting: the OBBBA’s new $6,000 senior deduction, effective for tax years 2025 through 2028, may create a narrow window for Roth conversions among qualifying retirees. Those whose total income falls below the phase-out threshold of $75,000 (single filers) or $150,000 (joint filers) may find that the extra deduction reduces taxable income enough to make a Roth conversion unusually cost-effective before the provision expires after 2028.

Editor’s note: This article has been updated to reflect current VTI data, including revised top-10 holdings, an updated 52-week price range of $304 to $374.70, ETF-specific net assets of approximately $663.5 billion, and a corrected RMD age of 73 under the SECURE 2.0 Act. The description of the One Big Beautiful Bill Act has also been corrected: the OBBBA did not eliminate taxes on Social Security benefits, but rather introduced a temporary $6,000 senior deduction for tax years 2025 through 2028. Vanguard’s competitive position has been updated to reflect its June 2026 ascension to the largest ETF issuer in the US, surpassing BlackRock.

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