The accelerated aging of China’s population will inevitably increase the burden of social retirement and significantly impact the development of financial markets, which is not conducive to sustainable social development. A proper allocation of financial assets will enable households to earn more property income and facilitate the appropriate allocation of social capital. The aging of the population is an essential factor affecting the allocation of financial assets to households. This paper examines the impact of an aging population on household financial asset allocation based on data from the 2015, 2017, and 2019 China Household Finance Surveys (CHFS). The study finds that aging significantly negatively affects household risky financial asset participation, depth of participation, and diversity. The findings remain robust after robustness tests using a two-way fixed effects model. In addition, this paper examines the mechanisms of influence from the perspectives of both risk aversion and financial literacy. In terms of mediating variables, aging increases the risk aversion of household heads, and an increase in risk aversion discourages households from investing in risky financial assets. In terms of moderating variables, the dampening effect of aging on investment in risky financial assets diminishes as financial literacy increases. In addition, empirical findings based on heterogeneity find that aging has a stronger negative impact on risky financial asset participation, depth of participation, and diversity in rural areas. Aging has a stronger negative impact on risky financial asset participation for households with children.