I'm 67 now and getting worried about how risky my portfolio is. Should I stick with the S&P 500 or are there any ETFs or mutual funds that would be a better fit for my age?

Attaining the right risk profile

When you’re young and in the process of building retirement wealth, it can be disheartening to see your portfolio value take a hit. However, you can take comfort in the fact that you’re not going to be using that money for many years.

At 67, though, you can’t afford to take on the same amount of risk since you might be on the verge of tapping into your retirement savings for income, if you’re not already in the process of doing so. And since the stock market has a tendency to be volatile, it’s important to limit the extent to which you’re invested in it.

Pulling out of the stock market completely isn't ideal, either. Having a small portion of stocks in your portfolio can help you continue to grow your nest egg as you decumulate. But at age 67, you may want to limit the stock portion of your portfolio to about 50% or less, and the exact percentage should hinge on your risk tolerance. If you don’t have a large appetite for risk, you may want to limit stocks to 40%.

It’s not a bad idea to keep the stock portion of your retirement portfolio in S&P 500 ETFs. This gives you exposure to the broad market, and you could also load up on some dividend ETFs for more regular income.

Speaking of which, it's important to make sure your portfolio aligns with your retirement income needs. The average Social Security recipient today collects about $1,981 per month. If your monthly benefit is similar, you may need to supplement it quite substantially by accessing funds from your retirement portfolio.

For this reason, your portfolio should not only have the right risk profile for your situation, but also provide the right amount of retirement income.

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Investment options for retirees to consider

Once you reach retirement age (or thereabouts), it's important to maintain a diversified portfolio that consists of different asset classes in order to manage your risk. That could be a mix of individual stocks, S&P 500 ETFs, dividend ETFs, bond ETFs and cash.

If you're particularly worried about market turbulence, you may want to favor low-volatility ETFs — funds that invest in assets whose value, historically speaking, hasn’t swung so wildly. Some examples include the Invesco S&P 500 Low Volatility ETF (IVZ) or the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD).

Dividend ETFs, meanwhile, might also deserve a place in your retirement portfolio, since the income they produce can serve as a hedge against market volatility. You can consider options like the Fidelity High Dividend ETF (FDVV) or the Vanguard Dividend Appreciation ETF (VIG).

On the bond side, you have choices. You could buy bonds individually or go with shares of a bond ETF. Examples of the latter that you may want to consider include the Fidelity Total Bond ETF (FBND) or the Vanguard Total Bond Market ETF (BND).

Municipal bonds are another good option to hold individually due to their tax benefits, as the interest they pay is tax-exempt at the federal level. And bonds issued by your state of residence should give you tax-free interest at the state and local level, too.

Finally, you may want to look at products like annuities that offer some amount of guaranteed retirement income. Combined with an age-appropriate and well-diversified portfolio, that could give you access to the income you need to live comfortably without taking on undue risk.