Nobody wants to guess at their asset allocation by age. If you’re wondering whether your balance of stocks and bonds still makes sense, you’re not alone. Many people lean on a quick rule of thumb to make that call.
One shortcut shows up everywhere: subtract your age from 100, and that’s the share of your portfolio to hold in stocks, with the rest in bonds and cash. Some planners now use 110 or 120 instead of 100, since people are living longer and need their money to last.
Age can be a starting point, but your income needs, goals, and time horizon are what determine whether the result fits. Here’s how the shortcut works, what it looks like by decade, and where it falls short. That way, you can feel confident in whatever number you land on.
The 100-Minus-Age Rule for Stocks and Bonds
The 100-minus-age rule became popular because it’s a fast and memorable way to get a target stock percentage. A 40-year-old following this rule holds 60% in stocks and 40% in bonds and cash. As they age, the stock share drops and the bond share grows.
But this rule of thumb ignores income, goals, and account structure.
Longer lifespans have an impact. Someone retiring in their 60s may need to fund 20 or 30 years of spending. That’s why many planners now use 110 or 120 minus age instead, to preserve a larger growth allocation.
Asset Allocation by Age: Quick Chart
Here’s how the three versions compare, decade by decade.
| Age | 100 Minus Age | 110 Minus Age | 120 Minus Age |
|---|---|---|---|
| 30 | 70% stocks | 80% stocks | 90% stocks |
| 40 | 60% stocks | 70% stocks | 80% stocks |
| 50 | 50% stocks | 60% stocks | 70% stocks |
| 60 | 40% stocks | 50% stocks | 60% stocks |
| 70 | 30% stocks | 40% stocks | 50% stocks |
| 80 | 20% stocks | 30% stocks | 40% stocks |
| 90 | 10% stocks | 20% stocks | 30% stocks |
The rest of each allocation goes into bonds and cash. For a full breakdown of what counts as diversification versus rebalancing, Boldin’s guide to asset allocation basics covers the difference.
What Changes at Key Ages
The percentages in the chart don’t capture everything that shifts as you age. A few milestones change your options even though the rule itself doesn’t mention them.
At 50, catch-up contribution rules let you put more into a 401(k) or IRA each year. More room to save can mean more flexibility in how you split new contributions between stocks and bonds.
Some people would rather not manage the shift year by year. A target-date fund automates a similar glide path, gradually moving from stocks to bonds as a target retirement year approaches. The built-in schedule has the same blind spot as any age rule: it doesn’t know your income or your goals either.
At 73, required minimum distributions force withdrawals from most tax-deferred accounts, whether or not you need the money that year. Selling into a down market to meet an RMD is one more reason your 70s allocation deserves more thought than a single percentage.
Why the Years Right Around Retirement Carry Extra Weight
The age rule treats every year the same, but the years right around retirement don’t behave that way. This is called sequence of returns risk: the same average return can produce very different outcomes depending on when the gains and losses land.
Vanguard research on past bear markets found that retirees who retired into a poor sequence of returns were 31% more likely to run out of money than retirees with identical savings and identical average returns. Someone five years from retirement is in a riskier window than the age rule accounts for.
Your 401(k) and Roth IRA May Need a Different Stock-Bond Balance
Age-based rules assume one account, but most people have savings spread across several. A 401(k), a Roth IRA, and a taxable brokerage account don’t always call for the same portfolio composition.
Bonds often make more sense inside a 401(k) or traditional IRA, since interest gets taxed as regular income either way. Stocks with long-term gains can do more work in a taxable account, where those gains get a lower tax rate.
The Boldin Planner can model your allocation across every account you hold. You can see the full allocation across your accounts in one place.
When Your Goals Matter More Than Your Age
Age is one data point. Your real answer depends on how much money you need, how much you want, and when you’ll need it.
Say you’re 60 with $800,000 saved and plan to spend $500,000 of it over your lifetime. You could invest that $500,000 using an age-based risk profile. The remaining $300,000 could go toward other goals, like leaving an inheritance, with its own allocation.
Someone who needs less than they’ve saved can often take on more risk than the age rule suggests.
Yale professor James Choi built a formula that weighs your income and savings, then sets your stock allocation. It treats Social Security and pension income like a bond. That money shows up every month, no matter what markets do. His research makes the case that age-based rules skip over your future income altogether.
That’s why the formula often calls for more stock than a simple age rule does. Take a 70-year-old couple with $72,000 in Social Security and $1 million saved. Choi’s formula puts them at 64% stocks, more than double the 30% that the age rule suggests.
Bucket strategies: Splitting money by when you’ll need it
A bucket strategy is another way to set your allocation, this time by timeline instead of age. Money you’ll need soon sits in cash and short-term bonds. Money you won’t touch for a decade or more can stay invested for growth. Boldin groups these into three bucket types, each built around a different time horizon. It’s the same logic behind Choi’s formula, just built through structure instead of math.
Questions that matter more than your birthday
Before you lock in an age-based number, a few questions cut closer to your real answer than the rule does:
- How much of your spending is already covered by Social Security or a pension?
- How would you react if your portfolio dropped 20% the year before you retire?
- Is your money in one account, or split across a 401(k), a Roth, and a taxable account?
- Are you within a decade of retirement, when a downturn does more damage than the same downturn later on?
- Is part of this money earmarked to leave behind, rather than to spend?
Answering these shifts your number more than switching from 100 to 110 minus age ever will.
Age Is Only One Input, Not the Answer
The age rule gives you a single number in seconds, but it can’t see your income, your timeline, or how your accounts are split. Your rate of return assumption matters just as much. Get that number wrong, and your target allocation shifts too. Boldin’s guide to the right rate of return to use walks through ranges for saving and withdrawing.
The Boldin Planner lets you test your allocation, your rate assumptions, and your income sources together. That gives you a fuller picture than any single rule can offer.
FAQ: Asset Allocation by Age
What should my asset allocation be at my age?
There’s a common shortcut: subtract your age from 100 to estimate your stock percentage, with the rest in bonds and cash. A 50-year-old using this shortcut holds about 50% in stocks. Many planners use 110 or 120 instead, reflecting the need for retirement savings to support a longer time horizon. Your own goals and income still shape the final number.
Is the 100-minus-age rule accurate?
The 100-minus-age rule is a shortcut, not a precise formula, and many planners now favor 110 or 120 instead. It remains a useful shorthand, but it cannot account for your spending needs, guaranteed income, tax situation, or tolerance for losses.
Should my asset allocation change based on future market returns?
Your asset allocation should account for your assumed rate of return, more than most people expect. A lower expected return calls for more savings, a longer working period, or a different stock-to-bond mix. Small shifts in that assumption can change your plan by years. Testing a few return scenarios before you retire is worth the time.
How often should I rebalance my portfolio as I age?
There’s no fixed cadence for portfolio rebalancing that works for everyone. Many people check their allocation once a year or after a major life event, like retiring or a big market swing. What matters more than the schedule is whether your mix still matches your goals and how your money is split across accounts.
Do target-date funds follow the same logic as the age rule?
Target-date funds use a similar glide path to the 100-minus-age rule, shifting from stocks to bonds as your target year gets closer. The schedule is usually more gradual than a strict age-minus formula, but it still can’t see your other accounts, your Social Security timing, or how much guaranteed income you’ll have.
