Asset Allocation by Age: Stocks vs Bonds Formula

A starting point by decade

• 20s and 30s: 85–90% stocks. Long horizon, and contributions matter more than returns.
• 40s: 75–85% stocks. Still growth-focused with a growing balance to protect.
• 50s: 65–75% stocks. Begin adding bonds as retirement comes into view.
• 60s: 50–65% stocks. Protect the first years of withdrawals.
• 70s and beyond: 40–55% stocks. Retirement can last 30 years, so growth still matters.

When to deviate from the formula

• A pension or large Social Security benefit acts like a bond, freeing you to hold more stock.
• Unstable income or job insecurity argues for a more conservative mix.
• Money needed within five years — a house down payment, tuition — should not be in stocks at all.
• If a 30% decline would make you sell, hold fewer stocks than the formula suggests.
• A large existing balance can afford more conservatism than the formula requires.

Implementing it simply

1. 1

   Choose your target stock percentage using the guidance above.

2. 2

   Hold a total US stock market fund as the core position.

3. 3

   Add 20–40% of the stock portion in international stocks for diversification.

4. 4

   Put the remainder in a total bond market fund.

5. 5

   Or use a single target-date fund that handles all of this automatically.

Rebalancing keeps it on target

• Rebalance once a year, or whenever any allocation drifts more than five percentage points.
• Rebalance inside retirement accounts first to avoid triggering taxable gains.
• Direct new contributions to the underweight asset instead of selling anything.
• See our full rebalancing guide for the mechanics.
• Compare your progress against net worth by age benchmarks.