Decision Guide · Reviewed 6 September 2026
Age 25: 90% stocks. Age 50: 70% stocks / 30% bonds. Age 65: 60% stocks / 40% bonds. Shift 1% annually as you age.
Asset allocation (stocks vs bonds) is your biggest return driver over decades, not individual stock picks. Younger investors can handle 90%+ stocks (recover from crashes). Near retirement, shift to bonds for stability. Age-based rules are ballpark; adjust for income stability and risk tolerance.
Classic age-based rule
Bond allocation = Your age. Example:
- Age 30 → 30% bonds, 70% stocks
- Age 50 → 50% bonds, 50% stocks
- Age 70 → 70% bonds, 30% stocks
Simple, but outdated (assumes 65-year retirement). Modern rule: "100 − age" or "110 − age" for longer retirements.
Risk-based allocation framework
| Age | Conservative | Moderate | Aggressive |
|---|---|---|---|
| 25–35 | 60/40 | 80/20 | 95/5 |
| 35–50 | 50/50 | 70/30 | 85/15 |
| 50–60 | 40/60 | 60/40 | 75/25 |
| 60–70 | 30/70 | 50/50 | 65/35 |
| 70+ | 20/80 | 40/60 | 55/45 |
Why this matters: 30-year outcome
$100K invested age 35, at retirement age 65:
- 95/5 (aggressive): $1.3M average (but −40% loss year happened)
- 70/30 (moderate): $1.1M average (max loss −20%)
- 50/50 (conservative): $850K average (max loss −10%)
Conservative costs $450K in final wealth over 30 years. But if you panic-sold at 2008 bottom (70% drawdown), 95/5 would have decimated you.
Rebalancing annually
Allocate funds to shift mix back to target annually:
- Target: 70/30. Market moves it to 75/25 (stocks up).
- Rebalance: Sell 5% stocks, buy 5% bonds.
- Forces you to "sell high, buy low."
When to deviate from age rule
- Stable income (tech, medicine): Can go more aggressive (90% stocks even at 50).
- Unstable income (commission, freelance): More conservative (50/50 earlier).
- Pension incoming: Can be aggressive (pension acts as bond).
- Healthcare stock/sector concentration: Rebalance to diversify.
Recommendation: Use age-based rule as starting point. Adjust for income stability and risk stomach. Rebalance annually. Don't market-time; let time do the work.