6.9% of 401(k) Savers in Their 50s Have Every Dollar in Stocks. A Bad Market the Year They Retire Can Cost Them More Than Any Other Year Ever Will

When you retire matters less than when the market decides to crash, and for savers who are fully in stocks heading into their final working years, the timing of that first bad year can quietly reshape everything that follows.

Life After Work desk. Editor: David Beren.

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Imagine how many 401(k) savers near retirement keep every dollar in stocks, and why a market drop’s timing matters more in the first years of retirement than at almost any other point. Some savers in their late 50s have stayed fully invested in stocks for decades, and that approach has produced gains in recent years. The S&P 500 is up about 13% so far in 2026 and around 263% over the past 10 years on a price basis, so little in recent memory has driven anyone to change course.

Fidelity’s fourth-quarter 2025 401(k) data covers 24.8 million participants as of December 31, 2025, and according to its platform, 6.6% of savers have a 100% equity allocation, meaning the account holds no bonds or cash.

For savers in their 50s, that share is slightly higher at 6.9%. Fidelity also notes that many participants age 55 and older hold more in stocks than their age would suggest. One reason may be how older workers signed up. More than 40% of workers in their 50s and early 60s pick their own investments, since many enrolled before automatic target-date options became common.

This is called sequence-of-returns risk. Two people can earn the same average return over a retirement and still end up with very different balances, depending on when the bad years show up. While someone is still working, a crash mostly delays progress. Once withdrawals start, a drop means selling shares at low prices to pay bills, and those sold shares aren’t around for the recovery.

Here’s a simple example with stated assumptions. Two retirees each start with $500,000 and take $30,000 at the start of each year for five years, with no fees, taxes, or inflation adjustments.

Both retirees average 4% a year, but retiree A, who hit the losses first, ends with $364,339. Meanwhile, retiree B ends with $438,411, a gap of about $74,072 created only by the order of the same five returns.

This has happened in real markets. Federal Reserve data show stock and mutual fund holdings of households ages 55 to 69 fell about 47% between the third quarter of 2007 and the first quarter of 2009.

Volatility has risen this year as well. The VIX, a gauge of expected market swings, reached 31 on March 27, 2026, a level linked to high fear, before falling to 18 in late October.

Retirees tend to use a few approaches, often in combination

There’s a risk on the other side as well. Retirement can last 30 years or more, and a portfolio that’s mostly cash and bonds may not keep up with inflation over that stretch. That’s how people can slowly run out of money, even without a crash. Stocks have been a source of long-term growth for many retirees, and that need for growth may continue after someone retires.

So most planning discussions focus on the mix for the specific years around the retirement date. Stocks are still part of the picture, but we usually treat the portion needed for the first few years of withdrawals differently from money you won’t use for a decade or longer (we walked through how to protect those opening years in a free guide on sequence-of-returns risk, here).

For savers in that 6.9% group, planning discussions often center on one question: if stocks fell sharply in the first year of retirement, how many years of spending could they cover without selling any of them? Depending on the answer, the current mix may already fit the retirement window, or the account may still be set up for a saver who’s decades away from needing the money.

Contact [email protected] for any questions or corrections.

David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.

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