Retirement investment horizon: decades after work
At 65, leaving work can mark the beginning of a retirement investment horizon lasting another 25 or 30 years. The last working day and the last day money will be needed can be decades apart. For financial planner Luke Delorme, that gap became a recurring subject in conversations with retired clients. When he called stocks a long-term investment, some clients said they no longer had a long term. Their working lives had ended, but their spending lives continued. Money intended for much later still faced the possibility of growth, inflation, and eventual use.
Delorme explored those concerns in June 2026 through the Center for Retirement Research. He was director of financial planning at Tableaux Wealth in Great Barrington, Massachusetts, and his discussion began with a 71-year-old retiree worried about Social Security. She depended on benefits for a sizable share of her spending and feared losing much of them after headlines about the retirement trust fund running out in 2032. The episode introduced his wider concern: fear could push people toward unnecessarily restrictive retirement decisions.
For the retirement investment horizon, Delorme used a particularly concrete example: a dollar held at 65 that would not be spent until 85. That money had two decades before its intended use. Left in cash, it could lose purchasing power to inflation over those years. Invested in stocks, it could potentially grow. The example attached time to a future expense rather than to employment status. A retiree could already be drawing money for current spending while still holding other money for a much later need. Those different spending dates gave the portfolio more than a single immediate purpose.
That timing changed the meaning of safety. Replacing stocks entirely with cash or low-yielding bonds might feel reassuring, yet Delorme identified another danger: outliving the money. A retirement investment horizon stretching across decades left room for that risk even after paychecks stopped. His approach retained stocks within a diversified portfolio for most retirees while allowing the allocation to become more conservative with age. Potential growth belonged alongside the need for caution.
Later expenses could also involve care. Delorme cited research indicating that about 80 percent of retirees would require some form of long-term care. Remaining at home could be a reasonable preference, but home health aides had a median annual cost of about $75,000, and intensifying needs could make staying home impossible. Less than five percent of people over 50 had private long-term care insurance. Without a plan, households could draw down savings and eventually rely on Medicaid. Saving for care therefore added a future purpose for investments beyond the regular annual spending that first came to mind at retirement.
An inheritance introduced another purpose within the retirement investment horizon. A portfolio could be intended partly for heirs, with money serving people beyond the retiree's own annual expenses. For that goal, or for long-term care, Delorme said at least a moderate stock allocation might make sense. Meanwhile, spending during retirement could involve principal as well as investment income. He described retirees living unnecessarily frugally because they tried to use only interest. With the U.S. stock market's dividend rate having fallen in the 21st century, dividends and income alone could be insufficient. The savings had been accumulated to help fund retirement itself.
Taxes added a separate complication to the spending schedule. Delorme noted that withdrawals from traditional 401(k) plans and IRAs were taxable as ordinary income. Social Security, pensions, and part-time employment could leave some retirees facing a higher tax bracket than they expected. He identified Roth conversions as worth considering before or early in retirement, particularly during years in a lower bracket. These involved paying taxes earlier while allowing subsequent tax-free growth. The timing of a withdrawal could therefore matter alongside the timing of the expense it financed, giving retirement planning another reason to extend beyond the date work ended.
The amount needed also depended on the household's spending and other income. Delorme contrasted annual spending of $50,000, partly met by $25,000 from Social Security, with spending of $100,000. The first household might not need more than $1 million in retirement savings; the second would need substantially more to cover its expenses. A retirement investment horizon had to accommodate that individual pattern rather than a universal savings target. For the retiree worried about benefits, continuing income was projected to cover 78 percent of scheduled payments in 2032. Delorme said the possible 22-percent reduction could be accommodated in her financial plan.