Asset Allocation by Age: How Your Mix Should Shift Over Time

The "110 minus your age" rule, and its limits

A common shorthand is to hold roughly (110 minus your age) percent in stocks, with the rest in bonds and cash. A 30-year-old would target about 80% stocks; a 60-year-old about 50%. It's a starting point, not a personalized plan — the SEC's own guidance emphasizes time horizon and risk tolerance over age alone.

The rule assumes you're saving for a single, distant goal like traditional retirement. It says nothing about other income (a pension, rental income, Social Security), how much you've already saved relative to your goal, or how you'd actually react to a 30% portfolio drop. Two 45-year-olds with identical account balances can reasonably hold very different allocations. Test your own mix in the asset allocation calculator rather than applying the rule blindly.

In your 20s and 30s: maximum time, maximum stock tilt

With 30+ years until a traditional retirement age, most guidance favors a heavy stock allocation — often 80-100% — because you have the longest runway to recover from downturns and the most years for compounding to work. A market crash early in your career is actually an opportunity: you're buying shares at lower prices with decades left to ride the recovery.

The real risk in this decade isn't holding too much stock; it's holding too much cash out of fear, or not investing consistently at all. A 25-year-old sitting in cash "waiting for a better time to invest" gives up the single biggest advantage this decade offers: time.

In your 40s and 50s: the glide toward balance begins

As retirement moves from abstract to specific — typically 10-25 years out in this range — many investors start trimming stock exposure and adding bonds, shifting from something like a 70/30 stock/bond split in the early 40s (in line with the "110 minus age" rule above) toward 55/45 or 60/40 by the late 50s. This isn't about giving up on growth; it's about reducing how much a bad market year could set back a plan that now has a firmer timeline.

This is also the decade to stress-test your plan rather than just follow a formula. Run your actual numbers — savings rate, expected retirement age, other income — in the retirement calculator to see whether your current mix is on track, rather than assuming the age-based rule alone is enough.

In your 60s and retirement: protecting what you've built

Close to and during retirement, the priority shifts from growth to preserving savings and generating income, since a major loss now has less time to recover before you need to start withdrawing. A common range is 40-50% stocks in the early retirement years, though this varies widely based on how much you've saved relative to your spending needs.

The common mistake in this decade is going too conservative too fast. Retirement can easily last 20-30 years, and a portfolio that's nearly all bonds and cash risks losing purchasing power to inflation over that span. Model how your allocation affects how long your savings last with the withdrawal calculator before locking in a very conservative mix.

What matters more than your age

Two factors override any age-based rule: your actual time horizon for each pool of money, and your genuine tolerance for watching your balance drop. A 55-year-old with a pension and modest spending needs can reasonably hold more stock than the rule suggests. A 35-year-old saving for a house down payment in three years should hold that specific money conservatively, regardless of how their retirement account is allocated — different goals, different timelines, different allocations, even at the same age.

The practical takeaway: use age-based rules as a rough starting point, not a formula to follow blindly, and revisit your actual mix at least once a year or after any major life or market change. Build and test your own numbers in the asset allocation calculator.

Frequently asked questions