Let’s say I’m 55 years old. I’ve worked hard, saved diligently, and now I’ve got $1 million set aside for the next chapter of life. Maybe I’m 5–10 years from retirement, maybe I’m already easing into it. Either way, here’s the big question:

How do I make sure I don’t screw this up?

Too aggressive and I risk losing a chunk.
Too conservative and I fall behind inflation, or worse, outlive my money.
Too hands-off and I become dependent on market whims, brokers, or the nightly news.

Here’s how I’d approach that $1M if I were in those shoes.

 

Step 1: Decide What This Money Needs to Do

At 55, the goal isn’t “getting rich” it’s making money work for you.

So I’d start by asking:

• Do I want this money to generate income now, or in 5–10 years?
• Do I want to protect principal or try to grow it modestly?
• Do I want to be hands-on or hands-off?

Most people I talk to want a mix of:

• Security (I can’t afford a massive drawdown)
• Cash flow (I want to live off the yield, not just watch numbers go up and down)
• Simplicity (I’m done managing spreadsheets of rental properties or chasing stock tips)

 

Step 2: A More Modern Allocation That Balances Income + Stability

This isn’t personalized advice, but it reflects how many investors should be shifting in 2025: less reliance on public markets, more focus on private alternatives and yield.

45% – Income-Producing Alternatives ($450k)

Private credit funds, royalties, asset-backed lending, diversified real estate income funds.
✔ Strong, predictable yield
✔ Low market correlation
✔ Great for monthly or quarterly income

30% – Broad-Based Domestic & International Equities ($300k)

Exposure to total-market U.S. and global equity funds, including large-cap, small-cap, developed and emerging markets.
✔ Long-term growth potential
✔ Inflation hedge
✔ Keeps the portfolio balanced and globally diversified

15% – High-Quality Bonds ($150k)

Intermediate-term bond funds, munis, or laddered corporate debt.
✔ Capital preservation
✔ Some income
✔ Buffer in market stress

10% – Cash & Short-Term Liquidity ($100k)

High-yield savings, short-term treasuries, or CDs.
✔ Optionality
✔ Emergency fund
✔ Sleep-at-night money

 

Final Thoughts

If I were 55 with $1 million, my goal wouldn’t be to chase big wins, it would be to protect what I’ve built and turn it into reliable, steady income.

I’d want peace of mind.
I’d want predictability.
And I’d want to sleep at night knowing my money was working for me, not the other way around.

That means thinking beyond just growth and starting to ask:

“How much of this portfolio is actually paying me every month?”

There’s no perfect formula, but with a clear plan, it’s absolutely possible to transition from asset accumulation to financial independence, without gambling or guessing.

You’ve done the hard part. Now it’s about making the next phase intentional.