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 altered radically. One of the fundamental bases for portfolio allocation has required revision. While these ratios have undergone significant change, the ETF boom now makes the menu of options across the board much broader than ever before. However, for a tried and true equities ETF, Vanguard Total Stock Market ETF (NYSE: VTI | VTI Price Prediction) still deserves consideration for 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 to create one of the largest retirement age demographics in US history. As such, many financial advisors, stockbrokers, fund managers, and accountants all commenced to devise a quiverful of marketing arrows designed for ready reference in portfolio allocation and asset management. 

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

Fast forward to 2026. Investors have experienced the following events since then:

• The 2000 dot.com stock market recession.
• The 2008 subprime mortgage banking meltdown.
• The 2020 Covid-19 pandemic.
• The 2020-2024 9%+ (total cumulative of 17.1% in 2023) inflation under Bidenomics.
• The incredible A.I. powered surge of the S&P 500, thanks to the Magnificent 7 tech stocks.
• Medical breakthroughs have increased leverage lifespans from 75.8 years in 1995 to 79 years in 2025, according to the CDC. 
• The Trump administration’s OBBA (One Big Beautiful Bill Act) of 2025 ended taxes on Social Security benefit payments and reduced a number of different taxes that had been imposed on seniors. 

In times like these, financial professionals have had to revamp their formulas and recommendations, given all of the new factors to be weighed for retiree portfolios. In addition to an exponentially greater range of investment product options, the equity percentages of portfolios have increased to provide the necessary asset growth to offset longer lifespans, inflation, changes in the tax codes (both federal and local), and escalating medical costs.

• Some advisors have revised the 100 year base to 110 years or even 120 years in order to increase the equity ratio portion.
• Eschewing an age-based calculation, some advisors are using a fixed ratio of 60/40 or 70/30 equity/bond ratio regardless of age.
• Ratios are tweaked on an individual basis, depending on tax bracket, Social Security benefits, medical insurance coverage, and other factors. 

The sheer volume of investment product choices can become overwhelming for some. Thankfully, there are some ETFs that have stood the test of time and continue to be solid performers, making for a safe growth vehicle as both a portfolio staple and as a fallback in case of losses incurred from more speculative vehicles: Vanguard Total Stock Market ETF.

Vanguard Total Stock Market ETF

Vanguard is one of the largest ETF issuers in the world and second in AUM only to BlackRock.

John Bogle of Vanguard is considered “the father of the index fund” and is credited with the equity/bond ratio formula cited above. He was a vocal critic of ETFs and thought they would be detrimental to investing. How ironic that since his retirement, Vanguard has become one of the largest issuers of ETFs in the financial industry. 

By design, stock indexes are intended to cover a category of stocks and then calculate averages of their various criteria to then quantify that category. The Dow Jones Average covers 30 stocks. The S&P 500 covers 500, and so on. VTI is an ETF whose benchmark is the CRSP US Total Market Index. This is meant to include large cap, microcap, and everything in between, so as to be representative of the entire US corporate stock market. 

VTI has 3,507 different stocks and a fairly low 0.03% expense ratio. It launched on May, 24, 2001. 

VTI’s top 10 holdings are:

• NVIDIA Corporation – 6.41%
• Apple Inc. – 5.93%
• Microsoft Corporation – 4.37%
• Amazon.com, Inc. – 3.20%
• Alphabet Inc. Class A – 2.66%
• Broadcom Inc. – 2.33%
• Alphabet Inc. Class C – 2.11%
• Meta Platforms Inc Class A – 1.99%
• Tesla – 1.66%
• Berkshire Hathaway Inc. Class B – 1.36%

VTI Flexibility

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

Assuming that the retiree is in reasonably good health and has at least small nest egg of savings, VTI can provide some strategic advantages, such as: 

• If a retiree holds both regular IRA and 401-K accounts as well as Roth accounts, VTI, which boasts a strong growth history and design, would be well suited for overweighting in Roth IRA accounts, which grow tax-free
• Accounts that are also subject to taxes might want to contain some VTI for growth. The growth factor would offset any potential principal reduction as a result of Required Minimum Distribution (RMD) protocols kicking in after a retiree reaches age 70, and also partially compensate for tax outlays.
• If RMD requires one to start partially liquidating some holdings, selling VTI, which has a small dividend, might be a preferable first choice, since the higher yielding bonds and more aggressive equity growth investments may be better retained for subsequent portfolio income and expansion.