Investors’ preferred asset allocations and financial circumstances become more diverse as they age, revealing an opportunity to help them benefit from personalized retirement solutions, according to new analysis from T. Rowe Price.

The analysis, based on a study conducted in partnership with researchers from the Massachusetts Institute of Technology Sloan School of Management and Stanford University, used the recordkeeper’s data to determine that investors aged 50 and older hold varied preferences to equity exposure.

Most in this group prefer a 60% to 80% equity allocation, while 10% of respondents said they want to avoid equities in general, 5% said they prefer all-equity allocation, and “others fall somewhere in between,” according to the analysis.

Conversely, the majority of younger investors (aged 20 to 34) said they prefer high-equity exposure (typically greater than 80%), a trend the study said aligns with life cycle investing—in which equity exposure starts higher in early career stages and decreases as the investor ages.

Further, older investors “take a more active role with their retirement portfolios” than younger ones, according to the report. From 2019 to 2024, only 26% of older investors made no changes to their equity allocations, while 46% of their younger counterparts did make changes.

However, of those who do change their equity allocations during the period in question, across all age groups, investors were more likely to increase rather than decrease equity exposure. The share of investors who increased their equity allocations went up with age—specifically, 50% of investors aged 50 or older increased their equity share. Researchers suggested this aggressive adjustment of asset allocations among older investors could mean that “many feel that they are lagging in savings and are trying to catch up.”

Personalized Investment Solutions

According to the report, the study showed that offering “professionally managed personalized investment solutions” to aging retirement investors has the potential to better serve their needs and preferences.

Sudipto Banerjee, global retirement strategist at T. Rowe Price and co-author of the study, said older plan participants are key candidates for personalized retirement solutions because of their preference for a diverse portfolio.

However, other factors should be considered to assess the effectiveness of such investment offerings, according to the report. One issue is that the success of these solutions is contingent on participant engagement and willingness to share personal information, which may be deterred by privacy concerns.

Another issue is that personalized products tend to carry higher fees, raising questions about balancing versus benefit, according to the study.

Lastly, increased personalization could lead to excessive portfolio monitoring and trading, which could harm returns.

According to the report, for successful adoption of personalized investments (either through managed accounts, dynamic qualified default investment alternatives or working with an adviser), fee structures must be carefully designed and be transparent.

Further, clear communication to explain changes in default investments, their benefits and associated costs is crucial. If these concerns are alleviated, the T. Rowe Price report said personalized investment strategies could improve retirement outcomes for investors.