There is no single "right" asset allocation, but there are a handful of useful rules of thumb that hold up across decades of data.
The Classic 110-Minus-Age Rule
A common starting point: stock allocation ≈ 110 − your age. A 30-year-old gets 80% stocks; a 60-year-old gets 50% stocks. The remainder is bonds and cash. Adjust if you are more or less risk-tolerant.
Why Bonds Matter Even When Young
Bonds don't make you rich — they keep you in the game. In severe downturns, holding 10–20% in bonds gives you something to sell that hasn't dropped, so you don't have to sell equities at the bottom.
Adjusting Through the Decades
- 20s: Maximum compounding window. 80–90% stocks is fine.
- 30s: Earnings rising fast. Same allocation, but contribute aggressively.
- 40s: Start tilting toward bonds. 70/30 is reasonable.
- 50s: 60/40. Begin thinking about retirement income.
- 60s+: 50/50 or 40/60, with enough cash for 1–2 years of expenses.
International Exposure
Most US investors under-own international equities. A 20–30% slice of stocks in international funds smooths returns and hedges dollar risk.
Rebalance, Don't Tinker
The discipline that matters more than the precise mix is rebalancing — selling whatever's drifted up and buying whatever's drifted down. Our Portfolio Rebalancing Calculator shows you exactly what to buy and sell to hit target.
Bottom Line
Pick a stock/bond split appropriate to your age and risk tolerance, rebalance once a year, and shift gradually toward bonds as you approach retirement. The exact numbers matter less than consistency.
Run the numbers yourself
Plug your own inputs into our free calculators — no signup.