"Hold your age in bonds" — or its twin, "100 minus your age in stocks" — is the most quoted asset allocation rule there is. At 30 it says 70% stocks; at 50, 50%; at 70, 30%. It is simple, it gets more careful as you get older, and it sounds prudent. The question is what it actually costs.
We tested it, and its two newer cousins — 110 minus your age and 120 minus your age — against a typical target-date glide path, on U.S. stock and bond returns from 1926 to mid-2023. The short answer: the classic rule was the most cautious path at every age, and that caution was expensive at both ends of life. A saver who followed it from 25 to 65 ended with a median $742,000 in today's dollars, against $1.03 million under 120 minus age — 28% less. Then, in retirement, it kept cutting stocks so far that it ran out of money in 20% of historical 30-year periods, the worst result of any rule we tested.
This guide is for people choosing a stock-and-bond split for long-term savings — a 401(k), an IRA, a brokerage account they will draw on in retirement. It does not cover which funds to buy, international stocks, how much cash to keep for emergencies, or annuities, and it is not advice about your own money. The point is narrower: an age rule is a starting point, and this one starts in a place most people would not choose if they saw the numbers.
The rulesFour ways to set your mix by age
Every age rule answers the same question — what share of my portfolio should be in stocks? — with a number that falls as you get older. They differ only in where they start and how far they fall.
stocks = 100 − age → age 30: 70% · age 50: 50% · age 70: 30%stocks = 110 − age → age 30: 80% · age 50: 60% · age 70: 40%stocks = 120 − age → age 30: 90% · age 50: 70% · age 70: 50%90% until 40 → 50% at 65 → 30% at 72, then flatThe first three are rules of thumb with no single author. The fourth is a real product design: Vanguard's target-date funds hold about 90% stocks until age 40, glide down to 50% at 65 and reach a final 30% stocks at 72. Most target-date funds in 401(k) plans follow a path of that shape, which is why it is the fair benchmark — it is what millions of savers actually hold by default.
Notice what none of the rules ask: how long until you need the money, what else you own, and how much of a fall you can sit through. The SEC's investor education site puts those two inputs — time horizon and risk tolerance — at the centre of asset allocation. Age stands in for both, and it is a rough stand-in.
Saving yearsWhat each rule left at 65
We followed a saver who put $500 a month (in today's dollars, so the contribution rose with inflation) into a portfolio from age 25 to 65 — $240,000 in total. Each January the portfolio was reset to the rule's target for that age, and new money went in at the target mix. We ran that 40-year life once for every starting month from 1926 to 1983: 690 overlapping careers. All figures are after inflation, in today's dollars.
100 minus age
- Average stocks, 25–65
- 55%
- Bad case (1 in 10)
- $476,656
- Worst period
- $352,573
- Median at 65
- $742,261
Fixed 60/40
- Average stocks, 25–65
- 60%
- Bad case (1 in 10)
- $489,966
- Worst period
- $365,935
- Median at 65
- $890,512
110 minus age
- Average stocks, 25–65
- 65%
- Bad case (1 in 10)
- $555,705
- Worst period
- $420,925
- Median at 65
- $871,220
120 minus age
- Average stocks, 25–65
- 75%
- Bad case (1 in 10)
- $648,523
- Worst period
- $488,754
- Median at 65
- $1,025,233
Target-date glide path
- Average stocks, 25–65
- 78%
- Bad case (1 in 10)
- $695,974
- Worst period
- $527,052
- Median at 65
- $1,083,699
| Rule | Average stocks, 25–65 | Bad case (1 in 10) | Worst period | Median at 65 |
|---|---|---|---|---|
| 100 minus age | 55% | $476,656 | $352,573 | $742,261 |
| Fixed 60/40 | 60% | $489,966 | $365,935 | $890,512 |
| 110 minus age | 65% | $555,705 | $420,925 | $871,220 |
| 120 minus age | 75% | $648,523 | $488,754 | $1,025,233 |
| Target-date glide path | 78% | $695,974 | $527,052 | $1,083,699 |
Source: CalculatorAI · calculatorai.app · CalculatorAI calculation on Robert Shiller's U.S. stock, bond and CPI data
Three things stand out.
- The gap is large and it compounds. 120 minus age ended ahead of 100 minus age in 689 of 690 periods, by a median of 24%. To match the target-date median under the classic rule, the same saver would have had to put in about $730 a month instead of $500.
- The cautious rule did not protect the bad cases either. You might expect the bond-heavy rule to lose on average and win when things go wrong. It did not: its worst 40-year outcome ($352,573) was below the worst outcome of every other rule. Over four decades, the extra bonds cost more in lost growth than they saved in crashes.
- What it did buy was a smaller drop right before retirement. In the last five years before 65, the typical worst fall was 8.0% under 100 minus age and 12.8% under 120 minus age; in the worst period, 27% against 35%. That is real, and for some people worth paying for — but it is the whole of what the extra caution bought.
RetirementWhere the rule really bites
The rule does not stop at 65. Followed literally, it keeps cutting stocks every year: 35% at 65, 25% at 75, 15% at 85. That is the part most people never think through, and it is where the classic rule did the most damage.
We gave a new retiree $1,000,000 at 65 and had them withdraw $40,000 a year, rising with inflation — the familiar 4% starting rate — for 30 years, to age 95. The portfolio followed each rule from 65 onward, again reset every January. We ran it for every starting month from 1926 to 1993: 810 overlapping retirements.
The classic rule ran out about three times as often as 120 minus age, and four times as often as a fixed 60/40 mix.
Show these figures as a table
| Value (% of retirements that ran out of money) | |
|---|---|
| 100 minus age (35% → 5% stocks) — 164 of 810 · median left $304,062 | 20.2 |
| Target-date path (50% → 30%) — 96 of 810 · median left $538,964 | 11.9 |
| 110 minus age (45% → 15%) — 92 of 810 · median left $544,282 | 11.4 |
| 120 minus age (55% → 25%) — 56 of 810 · median left $862,233 | 6.9 |
| Fixed 60/40 — 41 of 810 · median left $1,613,459 | 5.1 |
Source: CalculatorAI · calculatorai.app · CalculatorAI calculation on Robert Shiller's U.S. stock, bond and CPI data
A 30-year retirement is a long-horizon investment. Inflation keeps raising the withdrawal, and only stocks have reliably grown faster than inflation over decades in this data. A portfolio that is 85% bonds at 85 is betting that bonds will keep up with a rising withdrawal for another ten years — and over long stretches of the 20th century, they did not. In this data, 10-year Treasuries lost 26% of their value after inflation over the 1940s and 15% over the 1970s, and those decades sit inside most of the failed retirements.
None of the age rules was safe from a bad start. Someone retiring in January 1966 — into a decade of high inflation and flat stocks — ran out under every rule we tested: at 89 under 100 minus age, at 92 under a fixed 60/40. What the allocation decided was how often that happened, and how much was left in the periods that went well.
The agesWhat the rules say at 30, 50 and 70
If you want the rules side by side for a single age, this is the whole comparison. The target-date column is what an off-the-shelf fund for that age would hold.
30
- 100 − age
- 70%
- 110 − age
- 80%
- 120 − age
- 90%
- Target-date fund
- 90%
40
- 100 − age
- 60%
- 110 − age
- 70%
- 120 − age
- 80%
- Target-date fund
- 90%
50
- 100 − age
- 50%
- 110 − age
- 60%
- 120 − age
- 70%
- Target-date fund
- 74%
60
- 100 − age
- 40%
- 110 − age
- 50%
- 120 − age
- 60%
- Target-date fund
- 58%
70
- 100 − age
- 30%
- 110 − age
- 40%
- 120 − age
- 50%
- Target-date fund
- 36%
80
- 100 − age
- 20%
- 110 − age
- 30%
- 120 − age
- 40%
- Target-date fund
- 30%
| Age | 100 − age | 110 − age | 120 − age | Target-date fund |
|---|---|---|---|---|
| 30 | 70% | 80% | 90% | 90% |
| 40 | 60% | 70% | 80% | 90% |
| 50 | 50% | 60% | 70% | 74% |
| 60 | 40% | 50% | 60% | 58% |
| 70 | 30% | 40% | 50% | 36% |
| 80 | 20% | 30% | 40% | 30% |
Source: CalculatorAI · calculatorai.app · Rule formulas; Vanguard target-date glide path
Two patterns. Before 60, the classic rule holds 20 to 30 points less in stocks than a target-date fund — that is where the $340,000 median gap at 65 comes from. After 72, the target-date fund stops falling at 30% and the age rules keep going; 100 minus age reaches 20% at 80 and 10% at 90.
Your mixBetter ways to use an age rule
An age rule is useful as a first draft. Turn it into a decision with four adjustments.
Start nearer 110 or 120 than 100
If you are saving for retirement decades away, the classic rule's extra bonds cost a median quarter of your ending balance in our test — and did not rescue the worst periods.
Set a floor for retirement
Do not let the stock share keep falling forever. Target-date funds stop at about 30%; a 40–60% floor kept 30-year retirements funded far more often than a rule heading toward zero.
Count guaranteed income as bonds
Social Security, a pension or an annuity behave like a bond paying you every month. Someone with large guaranteed income can often hold more stocks in the portfolio than the rule says, not less.
Adjust for the drop you can actually sit through
The best allocation is one you will not abandon in a crash. If a 35% fall in the year before you retire would make you sell, choose a mix that falls less — and accept the smaller expected balance knowingly.
Once you have a target, the work is keeping it. Markets drift a mix away from target every year — a 60/40 portfolio left alone drifted to a median 75% stocks over 20 years in our rebalancing test — so the allocation you pick is only as good as the habit of checking it. That is also why an allocation is the core of real diversification: the mix of asset classes moves your results far more than the number of funds you hold.
The Asset Allocation Calculator starts from 110 minus your age and then moves the stock share up to 15 points for your risk tolerance and further for your time horizon, so it gives you a personalised first draft rather than the classic rule. The Portfolio Tracker then holds you to it: give each holding a target weight and its Analytics tab flags anything that has drifted 5 points or more and shows roughly how much to buy or sell. If your retirement savings sit in a workplace plan, the default fund there is usually a target-date fund — how to get the most from a 401(k) covers the match and contribution rules that matter more than the fund choice in your first years.
MethodWhere these numbers come from
- Data. Robert Shiller's public dataset (econ.yale.edu/~shiller/data.htm), January 1926 to June 2023, the last month with dividend data in the file. Stocks: S&P Composite, monthly total return = (price + one month of dividends) ÷ last month's price. Bonds: the dataset's monthly total return series for 10-year U.S. Treasuries. Both deflated by the dataset's CPI series, so every dollar figure is in constant (today's) dollars.
- Rules. Stock share = 100, 110 or 120 minus age; the target-date path is 90% to age 40, a straight line to 50% at 65 and to 30% at 72, then flat, following Vanguard's published glide path. The portfolio is reset to the target once a year; each month's contribution or withdrawal goes in or comes out at the current mix.
- Saving years. $500 a month in real terms from age 25 to 65 (480 months); 690 overlapping 40-year periods, one starting each month from February 1926 to July 1983. "Bad case" is the 10th percentile across periods.
- Retirement. $1,000,000 at 65; $40,000 a year in real terms, taken monthly ($3,333); 30 years. "Ran out" means the balance could not cover a month's withdrawal before age 95. 810 overlapping periods starting February 1926 to June 1993.
- What it leaves out, and which way it leans. No taxes, fund fees or trading costs, which slightly flatters every rule equally. Ten-year Treasuries swing more with interest rates than a typical total bond fund, and their real returns were poor in the 1940s and 1970s — both of which make bond-heavy rules look worse than they might with shorter bonds or inflation-protected Treasuries (TIPS). Today's starting point is different too: the 10-year Treasury now yields about 5.3%, far above most of the 20th century, which favours bonds going forward. U.S. stocks only, and the U.S. had one of the best stock markets of the century, which flatters stock-heavy rules. The overlapping periods share most of their years, so they are not 690 or 810 independent experiments.
This is history, not a forecast. Nothing here is advice about your own money.
FAQAsset allocation by age
What is the "100 minus your age" rule?
It is a rule of thumb for splitting a portfolio between stocks and bonds: subtract your age from 100 and hold that percentage in stocks, the rest in bonds. At 40 that is 60% stocks and 40% bonds; at 65, 35% stocks. It is also stated as "hold your age in bonds". It has no official source and was never designed around today's life expectancy.
Is 110 or 120 minus your age better than 100 minus your age?
In our test of U.S. data since 1926, both left savers better off. A saver putting $500 a month away from 25 to 65 ended with a median $871,220 under 110 minus age and $1,025,233 under 120 minus age, against $742,261 under 100 minus age, all in today's dollars. The cost was a larger drop just before retirement — a typical worst fall of about 11–13% in the last five years instead of 8%.
What is a good asset allocation at age 30, 50 or 60?
There is no single right answer, but common reference points are the age rules and target-date funds. At 30 they range from 70% stocks (100 minus age) to 90% (120 minus age and a typical target-date fund); at 50, from 50% to about 74%; at 60, from 40% to 60%. Your time horizon, guaranteed income such as Social Security and how large a fall you can tolerate should move you within that range.
Do target-date funds follow the 100 minus your age rule?
No. They hold considerably more in stocks before retirement. Vanguard's target-date funds hold about 90% stocks until age 40, glide to 50% at 65 and stop at 30% at 72. Under 100 minus age, a 40-year-old would hold 60% stocks and a 65-year-old 35%.
Should my portfolio keep getting more conservative after I retire?
Not indefinitely. A retirement can last 30 years, and withdrawals that rise with inflation need growth to keep up. In our test, following 100 minus age into retirement — down to 15% stocks at 85 — ran out of money in 20% of 30-year periods at a 4% withdrawal, against 7% for 120 minus age and 5% for a fixed 60/40 mix. Most target-date funds stop reducing stocks at around 30%.
