The right asset allocation isn’t a one-size-fits all portfolio. Here’s how to find the one that’s right for you.

Question: What is the most aggressive asset allocation that a 70-year-old retiree should have? –Martin Reynoso, Albuquerque, New Mexico

Answer: Your question is kind of like asking how vigorous an exercise program a 70-year-old can engage in.

The answer is “not very” if that person has medical problems, leads a largely sedentary lifestyle and hasn’t broken a sweat since the Carter administration.

If, on the other hand, someone in his or her 70s is healthy, fit and has been working out regularly, then he or she may be able to handle quite rigorous workouts.

Well, a similar principle applies to investing, which is to say that the way you allocate your retirement portfolio among stocks, bonds and cash should depend not just on your age but your individual circumstances.

For example, if you’re 70, your only source of regular income is Social Security and you have a relatively small portfolio of investments that you depend heavily on to supplement your Social Security check, then you can’t afford to get too aggressive in your investment strategy. If your small nest egg takes a big hit, your standard of living could suffer dramatically. Continue reading →