The allocation to stocks, fixed income, and cash that's best for you will depend on your circumstances and tolerance for risk. You may consider starting retirement at no more than a moderate level of risk and gradually shifting your portfolio toward more fixed income investments. As your retirement time horizon becomes shorter, your risk tolerance declines, and your need for long-term growth lessens.

Here's an example of how you might adjust your asset allocation through retirement.

Ages 60–69
Ages 70–79
Moderately Conservative
Ages 80+
5% cash 10% cash 30% cash
35% fixed income 50% fixed income 50% fixed income
60% stocks 40% stocks 20% stocks
Return (1970–2013) Return (1970–2013) Return (1970–2013)
Average Annual Return: 9.8% Average Annual Return: 9.1% Average Annual Return: 7.9%
Best Year: 30.9% Best Year: 27.0% Best Year: 22.8%
Worst Year: –20.9% Worst Year: –12.5% Worst Year: –4.6%