This study examines how financial asset allocation, particularly equity ownership as a share of non-housing wealth, affects retirement satisfaction among U.S. retirees. Using Wave 15 of the Health and Retirement Study (HRS) and guided by Modern Portfolio Theory (MPT), the analysis includes 4,248 retired participants. Three models were estimated: (1) an ordered logistic regression with a binary stock allocation threshold (>50%), (2) an ordered logistic regression with categorical equity groups (0–25%, 25–50%, 50–75%, 75–100%), and (3) a generalized ordered logit model treating stock allocation as a continuous quadratic predictor.

Findings reveal a statistically significant nonlinear relationship between stock allocation and retirement satisfaction. Retirees with 25–75% of non-housing wealth in equities reported higher satisfaction, though gains diminished at the upper range. The hypothesis was supported: those with more than 50% in equities had 41% higher odds of being “very satisfied.” The optimal allocation was estimated near 52%, minimizing the likelihood of low satisfaction. Marginal effects confirmed that moderate equity ownership significantly increased the probability of reporting high retirement satisfaction.

These results emphasize the importance of balanced, strategic asset allocation. Moderate stock exposure aligns with MPT’s efficient frontier, offering practical guidance for financial planners, educators, and policymakers.

Accepted Oral Presentation