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Check out the AARP Memorial Day Sale! Join AARP for $11 for your first year with a 5 year membership. + get a Free Gift! Do you know the value of an AARP membership?
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Investing in the S&P 500 for Retirement: Strategies by Age Group

Fact checked by Vikki VelasquezInvestopedia / Michela Buttignol Investors should rebalance their portfolios as they get closer to retirement.The S&P 500, also popularly called "the market," is a benchmark that tracks the performance of around 500 of the U.S.'s largest publicly traded companies. The S&P 500 is inherently well-diversified and highly efficient. With lifetime returns averaging 10%, low-cost index funds or exchange-traded funds (ETFs) that track the S&P 500 provide retirement-focused investors a solid opportunity for at least part of their portfolio.Risk, timeline, and goals are the driving forces behind investor portfolios. The general rule is that investors take on less risk as they approach retirement. Younger investors, with time on their side, can generally take on more risk and have a larger portion of their portfolios allocated to stocks, like S&P 500 index funds, because they have plenty of time to recover from market fluctuations. This guide offers age-specific investing advice from financial advisors for young investors, mid-career professionals, and pre-retirees using the S&P 500 as a core retirement holding.Key TakeawaysThe S&P 500 is a solid choice for core retirement holdings, but reallocation is key as investors get closer to retirement.Younger investors can benefit from a high stock allocation because they have longer timelines to recover from market downturns.Mid-career investors should gradually rebalance their portfolios toward more conservative investments as their careers progress.Pre-retirees may prioritize capital preservation and income generation, but these portfolios should also be well-diversified to prevent overexposure to any asset. Investors can use cost-effective ETFs and index funds to gain exposure to the S&P 500 in retirement accounts.Younger Investors (20s–40s)High Stock AllocationThe S&P 500 can propel retirement savings in the early years for young investors. With decades until retirement, young investors can weather the stock market's highs and lows with plenty of time for recovery.A portfolio for a young investor should have a high equity allocation. Investors in their 20s should strive for as much as 90% of their portfolio in stocks. Even workers in their 40s still have plenty of runway before they take off, so an 80% stock allocation is appropriate for many of their investment portfolios.Long-Term FocusPrince Dykes, founder and chief investment officer at Royal Financial Investment Group, said that he finds his younger clients often favor low-cost, passive investing (e.g., ETFs like VOO or SPY) and are "more comfortable with technology-driven investment platforms."The buy-and-hold strategy has a proven success record in the long term. Staying invested through all market cycles is key to success. Trying to "time the market" is usually counterproductive. Dollar-Cost AveragingDollar-cost averaging (DCA) involves regularly investing the same amount of money into a security. It is an effective way for investors to remove the pressure to time the market, lower their average cost per share, and reduce the impact of market fluctuations in their portfolios. DCA into funds with a solid record, like S&P 500 funds, helps build discipline and reduce the emotional impact of market swings.Embracing Market Ups and DownsInvesting is a rollercoaster, and understanding how to hold on when the market dips is crucial for success. Still, it's shocking to see your portfolio balance plummet, but that's when investors need to go back to the basics and remember their risk tolerance, timeline, and goals. If your portfolio aligns with those factors, you should stay the course or even buy the dip, which can lower your cost basis over time.Martin A. Smith, founder and president of Wealthcare Financial Group, reminded investors, "The key to avoiding panic selling is rooted in strategy, not sentiment. When the market pulls back, it may simply be an opportunity to rebalance, not retreat."Mid-Career Investors (40s–50s)Continue Steady ContributionsDespite being in their highest earning years, mid-career investors usually feel their belts tighten when sandwiched between the costs of raising their own children and caring for aging parents. Dropping investment contributions seems easy when stretching the household budget, but continuing steady contributions is critical to long-term success and to help reach your retirement goals.TipFor investors with matching contributions, continuing to invest up to the matching employer contribution level doubles the impact of their savings.Gradual ReallocationsBy the time investors enter their late 40s and early 50s, they've probably started to think about retirement more concretely than in their early investor years. As that time draws closer, investors should gradually shift their asset allocation away from stocks and into assets focused on capital preservation and income. In excellent years for the market, like 2024, when the S&P 500 returned 23%, it may seem ill-advised to reallocate away from stocks. However, as you get closer to retirement, you should be gradually smoothing out volatility in your portfolios.Rule of 100The Rule of 100 is a retirement savings guideline where you subtract your age from 100 to determine your ideal stock allocation. This rule is a helpful starting point, but many advisors consider it overly simplistic. As Martin put it, "A portfolio built solely around one's age may leave investors overexposed just when they need stability the most." Further, Martin added, "Economic disruptions—like 9/11 or the 2008 financial crisis—don't respect retirement dates." Appropriate stock allocation is far more dependent on an investor's age, timeline, and goals than on a magic number.TipSome experts advise using 110 minus your age or even 120 or 125 minus your age instead of the standard Rule of 100 formula. However, even that is just a guideline.RebalancingRebalancing is the part of investing that many investors skip. When markets are popping off, few investors think that signals a great time to offload some top performers. However, rebalancing in mid-career years is especially important as market gains can distort intended asset mixes.Thomas Kopelman, co-founder and financial planner at AllStreet Wealth, warned, "The biggest mistake is simply not rebalancing... If you did this from 2008 till now, you would be very overweight in large-cap growth and very underweight in international bonds if you are older or have a lower risk tolerance."Pre-Retirees (50s and Older)Lower Risk ToleranceThe closer you are to retirement, the more protecting what you've earned becomes your top priority. Focusing on capital preservation doesn't mean stuffing $100 bills in your mattress, and it doesn't mean ditching stocks entirely. Equity investments may still have a place in your portfolio as you get closer to clocking out for the last time.Martin said, "A conservative portfolio can certainly include S&P 500 holdings to boost return potential, but it should be part of a wider asset allocation framework designed to reduce volatility and safeguard capital as retirement approaches."DiversificationDiversification across asset classes like bonds, stocks, and government securities becomes increasingly vital at pre-retirement, as most people reduce equity exposure and add income-producing or capital preservation assets. Even within asset classes, it's a good idea to look closer at where your money is going, especially in equity investments.S&P 500 funds or ETFs are inherently diversified. However, Thomas cautions that overexposure to the S&P 500 alone can be risky, especially for pre-retirees: "Right now, Mag Seven stocks (Magnificent Seven or the seven largest and most influential tech-oriented companies) are over 35% of the Index. You may want to be more diversified than that, especially as you get older and near retirement."Considering Retirement NeedsPrince noted that the S&P 500 is still appropriate for some investors with shorter time horizons. However, its allocation should shrink as retirement approaches: "Using a blended approach that shifts as the target date approaches emphasizes stability while maintaining some growth potential."By aligning portfolios with evolving income needs, considering expenses like health care, travel, or housing, investors can better support their lifestyle while preserving their nest egg. How Much Should I Have Invested for Retirement by Age?Experts, like those at Fidelity, offer savings benchmarks by age rather than dollar amounts. They suggest saving at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.How Do I Invest in the S&P 500 in a Retirement Account?Most retirement accounts (401(k)s, IRAs, and brokerage accounts) offer S&P 500 index funds as a holding option. If you're having trouble finding one in the available offerings, you can search by ticker symbol. Is the S&P 500 a Good Investment for Retirees?The S&P 500 is a good investment for retirees if it aligns with their current risk tolerance, timeline, and goals. It offers growth potential, but retirees should anchor that growth and associated risk with bonds or other income-producing assets. What Is the Average Return of the S&P 500?The S&P 500's average return is around 10% annually before inflation. After inflation, its return is around 6-7%. Past performance does not guarantee future results, but the S&P 500 has a historical success record.The Bottom LineWhatever your age, the S&P 500 can be a powerful foundation for a retirement portfolio covering large-cap exposure in one diversified swoop. Young investors can lean into the potential growth that equity investments offer, mid-career savers should gradually reallocate their portfolios to match their risk, and pre-retirees should prioritize capital preservation and income while leaving room for some growth. Your goals, timeline, and risk tolerance will shift with each life stage. Allow them to drive your investment vehicles without fear or hype over market returns.
Warren Buffett Bought His First Home for $31,500 in 1958. How Much is it Worth Today?

Warren Buffett bought a modest home in Omaha, NE for $31,500 in 1958 that he still owns.Warren Buffett’s Omaha home, which he bought for just $31,500 in 1958, is now estimated to be worth as much as $1.5 million. That’s a nearly 45-fold increase, an impressive return by any standard, once again underscoring Buffett's focus on value and investing for the long term.Key TakeawaysBuffett’s Omaha home, bought for $31,500 in 1958, is now valued at up to $1.5 million.Buffett’s philosophy: buy a home only when it fits your needs and budget, not to impress others or chase trends.A 30-year fixed-rate mortgage and disciplined financial choices can help you build lasting wealth.The Story Behind Buffett’s $31,500 HomeWarren Buffett purchased his Omaha home in 1958, at just 28 years old. He and his then-wife, Susan, were raising three young children and sought a practical, comfortable place to call home. The property they chose was a five-bedroom stucco house built in 1921, located on a corner lot not far from Omaha’s city center.Buffett’s rationale for the purchase reflected the same value-driven mindset that defined his investment career. He and Susan delayed buying until they felt financially secure, weighing whether to use their savings for a home or invest elsewhere. Buffett saw the house as a sensible, long-term investment, one that offered stability for his family without unnecessary excess. He has often described the home as one of his best investments, ranking it just behind his wedding rings for the memories and satisfaction it provided.How Much Is Buffett’s House Worth Today?Buffett’s home is now estimated to be worth between $1.2 million and $1.5 million in 2025, according to recent valuations from Realtor.com, Zillow, and some news outlets. The most frequently cited figure appears to be $1.4 million. This appreciation far outpaces that of most U.S. homes, whose median sales price rose from $17,800 in 1963 to $416,900 in early 2025, roughly a 23-fold increase.Despite this impressive growth, Buffett’s home remains modest by billionaire standards. For comparison, many ultra-wealthy individuals own properties valued in the hundreds of millions of dollars. Bill Gates’s 66,000-square-foot estate in Washington is valued at $127 million.For Buffett, the house’s value is less about financial return and more about personal satisfaction and practicality. He has repeatedly stated in interviews and shareholder letters that, while the home was his third-best investment, he would have made more money by renting and investing the difference in stocks.Bottom LineLearn from Warren Buffett's first home purchase: patience, practicality, and a focus on value can yield significant long-term financial benefits. His early experience shows that wealth isn't all about lavish possessions and that discipline and a long-term commitment truly matter. When making your own financial decisions, prioritize lasting value, understand what you're getting into, and let your genuine needs, not fleeting trends or outside pressures, be your guide.
Gen X Fears Running Out of Money More Than Death—Here's How To Combat That Fear

Fact checked by Suzanne Kvilhaugrichiesd / Getty Images A new survey finds that most Gen Xers worry more about running out of money than death.Most Gen Xers, or people in their 40s and 50s who are approaching retirement, worry more about running out of money than death, according to a 2025 Study from Allianz.Seven out of ten Gen Xers are more afraid of running out of money in their lifetimes than dying compared to two-thirds of millennials and 61% of baby boomers, many of whom may already be retired.Factors contributing to this fear are high inflation, concerns that Social Security will be inadequate, and high taxes.Key Takeaways70% of Gen Xers, 66% of millennials, and 61% of baby boomers fear running out of money more than death.To combat this fear, take a close look at your finances and establish a financial plan with the help of a financial advisor.Take advantage of catch-up contributions. If you are 50 and older, you can make a $7,500 catch-up contribution to your 401(k) plan and a $1,000 catch-up contribution to your individual retirement account (IRA).Ways to Combat the Fear of Running Out of MoneyGet a Financial PlanRather than panicking, it’s a good idea to meet with a financial planner and go through the specifics of the money you’ll need for retirement, plus your income streams and current investments.“A good financial plan can help you see whether you’re on track or not, and what adjustments you need to make. Often, the fear is worse than the reality. But you won’t know until you run the numbers,” says Alvin Carlos, a certified financial planner and managing partner at District Capital Management.Use Catch-up ContributionsIf you are Gen X and feeling behind on your retirement savings, utilize catch-up contributions to make up some ground.“For 2025, those 50 and older can contribute an extra $7,500 to their 401(k). That’s a powerful way to boost savings in a short window,” Carlos says.And if you have an individual retirement account (IRA) and are 50 and older, you are eligible for a catch-up contribution of $1,000 in 2025.There is also an even higher 401(k) catch-up contribution for workers ages 60, 61, 62, and 63: $11,250 in 2025.Consider Part-time WorkPlanning to work a part-time job in your 60s can take some of the pressure off.“Retirement doesn’t have to be all or nothing,” Carlos says. “Working even part-time in your 60s can reduce how much you need to withdraw from savings.”How to Save More for RetirementEven with this fear of running out of money, 62% of Americans say they are not saving as much for retirement as they would like. Common factors keeping people from saving more for retirement are day-to-day necessities taking priority, credit card debt, and housing debt.But it doesn’t have to be that way. Here are some tips for increasing your retirement savings.Get Off to a Good StartEven if it’s just a small amount, earmark some of your salary to your retirement savings.“Start small and automate it,” says Daniel Milks, a certified financial planner and founder of Fiduciary Organization. “You don’t need perfection—just progress.”Sign up for your employer’s 401(k) plan and decide how much of your salary to be automatically put aside for your retirement. Can you handle investing 10% or 15% of your salary? At the very least, invest enough to get your employer’s matching contribution. This is free money from your employer, so be sure to take advantage.Get Real With Your BudgetYou’ll need to take a good look at your spending and expenses. Where can you cut back and make more room for savings and investing?“Spend some time creating a realistic budget to see what you’re currently spending. Without this, you’re likely to overspend and never have enough for savings goals,” says Jarrod Sandra, a certified financial planner and owner of Chisholm Wealth Management.Trim your expenses and automate the extra savings into a traditional or Roth IRA.Get Rid of Credit Card DebtHanging on to high-interest credit card debt drags down your finances. You’ll have more money to put toward savings and retirement without it.“Prioritize getting out of credit card debt above all else. It’s just a killer to your financial plan,” Sandra says.You may consider utilizing the avalanche method—which focuses on paying down the debt with the interest rate first—or the snowball method—which involves paying off the smallest balance first.Both strategies will can help you pay down credit card debt, so use the one that works best for you.Put Raises to Good UseWith every raise you get at work, apply it to a retirement savings plan.“If you have an employer with a retirement plan, see if you can set up automated annual increases in your retirement plan contributions,” says Eric Maldonado, a certified financial planner and owner of Aquila Wealth Advisors. “A good goal is increasing your retirement plan contribution by 1% or more annually.”The Bottom LineA majority of Gen Xers, millennials, and baby boomers all fear running out of money. To fight this fear, you have to face the numbers. Review your finances and build a financial plan with the assistance of a financial planner. If you are 50 and older, you’ll want to take advantage of catch-up contributions for your 401(k) plan and IRA. Another way to ease the fear of running out of money is to 'semi-retire' or work part-time in your 60s.In addition to fears of running out of money, most Americans say they are not saving enough for retirement. To save more for retirement, scrutinize your budget. Where can you cut your spending to make more room for retirement savings? Pay off high-interest credit card debt, and apply the payments you were making to your retirement account. Increase your retirement contribution by 1% or more each year.