Retirees Can Look At Balanced Allocation ETFs For An Easier Time Managing Their Wealth

Retirees looking for more of a one-stop-shop investment solution that takes care of asset allocation may wish to check out some of the “balanced” ETF offerings offered by iShares. Undoubtedly, such offerings probably won’t be the right fit for investors seeking more of a hands-on approach. Either way, if you value simplicity, low costs, and top-notch management over customization, perhaps going down the route of a balanced ETF can make for a sounder sleep.

In this piece, we’ll check out a trio of balanced ETF options perfect for retirees looking to set and forget. With broader market volatility picking up in the face of Trump tariffs, I’d argue such a balanced and hands-off approach could be one of the least stressful ways to keep investing amid the recent pick-up in turbulence.

And while the following ETFs have professional management running the show, there’s still no excuse for not contacting a financial advisor for a second opinion. Indeed, they can chime in on the ETFs you’re looking to pick up, suggest alternative options and ensure your blindspots are clear as you set sail into retirement. 

Without further ado, let’s check in on two different flavors of balanced ETFs that can cater to a wide range of needs. Whether you’re a retiree who’s looking for less volatility, more yield, a bit of growth, or a mix of all of the above, there’s a likely the perfect balanced allocation ETF out there that checks all your boxes.

iShares Core 60/40 Balanced Allocation ETF

The iShares Core 60/40 Balanced Allocation ETF (NYSEARCA:AOR) is probably the best fit for most retirees. It offers the typical 60/40 (60% stocks, 40% bonds) mix that’s common among older or more conservative investors.

Undoubtedly, the 60/40 portfolio fell flat on its face in 2022, when stocks and bonds fell together — a rare occurrence that caused some to deem the 60/40 portfolio is no longer the optimal asset allocation. Whether the 60/40 portfolio is dead, though, remains up for debate. Personally, I still think it can be a good fit for retirees seeking modest growth and relative stability. The AOR boasts a nice 2.59% yield alongside a 0.98 beta, which entails about as much volatility as the S&P 500.

For now, only time will tell if stocks and bonds will move hand-in-hand again in the next financial market correction. For those who are fans of traditional allocations, I find it’s still tough to top 60/40. And for those who want to stay subscribed to that allocation, the AOR is a great pick with its modest 0.25% expense ratio.

iShares Core Moderate Allocation ETF

For retirees who want more of a tilt towards stability over growth, the iShares Core 40/60 Moderate Allocation ETF (NYSEARCA:AOM) may be a better pick. As the name suggests, it’s comprised of 40% stocks and 60% bonds. Though the AOM’s longer-term growth trajectory is limited compared to the AOR (the 60/40 portfolio), the smoother ride is sure to be appreciated by the more risk-averse retirees out there.

Of course, 2022 was a huge a shocker of a year for the 40/60 portfolio as the AOM dipped into a bear market from peak to trough. Undoubtedly, it’s not all too common that stocks and bonds tank together. And while the AOM has yet to recover, I do find the 3% yield and lower beta (0.83) to be compelling for retirees who value a smoother ride over all else, including growth.

If the past week of tariff jitters has you biting your nails, perhaps the AOM could make for a better night’s sleep! However, if you’re not at all rattled by occasional market corrections, the growthier 60/40 allocation may be more your cup of tea.