Asset Allocation by Age: How Much Should You Have in Stocks vs Bonds at Every Decade?

How you split your money between stocks, bonds and cash is one of the most important investing decisions you will make. Vanguard argues it matters more than which investments you choose. Age is the usual starting point, but it really stands in for two other things: how many years until you need the money, and how well you could live through a bad market.

Below: the popular rules of thumb, what the big target-date glide paths actually hold, nearly a century of results for each stock/bond mix, and a decade-by-decade guide with the factors that should push your number up or down.

Quick answer: asset allocation by age

• Common rules of thumb (the share of your portfolio in stocks):
  • 110 minus your age: about 75% stocks at 35 and 45% at 65.
  • 120 minus your age, a more aggressive version: about 85% at 35 and 55% at 65.
  • “Roughly your age in bonds”, which John Bogle called a “crude starting point”: 35% bonds at 35 and 65% bonds at 65.
• What professional glide paths do:
  • Vanguard’s target-date glide path holds about 90% stocks until around age 40. It then cuts back gradually to about 50% stocks at 65, reaching a final 30% stocks / 70% bonds around age 72.
  • Fidelity’s 2065 index target-date fund held 93.0% in stock funds on March 31, 2026.
• The trade-off, using Vanguard data for 1928–2025:
  • An all-stock mix averaged 11.8% a year, but its worst calendar year was −43.3%.
  • A 60/40 mix averaged 9.1% with a worst year of −26.9%.
  • All bonds averaged 5.2% with a worst year of −12.9%.
• The honest answer: use your age to get a starting range. Then adjust for your time horizon, job stability, any pension or Social Security income, how big your savings are relative to what you need, and whether you would sell in a crash.

This article is educational and is not personalized investment advice. Figures were checked against primary sources (Vanguard, Fidelity, Investor.gov, the IRS and the SSA) as of October 15, 2026.

What asset allocation means (and why it matters more than fund picking)

The SEC’s investor site, Investor.gov, defines asset allocation as dividing a portfolio among asset categories such as stocks, bonds and cash. It says the right mix for you “at any given point in your life” depends mainly on two things:

• Time horizon: the number of months, years or decades until you need the money for a goal. With a longer horizon you can wait out downturns, so you can usually carry more volatility.
• Risk tolerance: your ability and willingness to lose some or all of your original investment in exchange for greater potential returns.

• Stocks are the growth engine, with the highest long-run returns and the deepest drawdowns.
• Bonds are the shock absorber: lower returns, much smaller losses in bad years.
• Cash (savings, money market funds, CDs, T-bills) is liquidity for near-term spending. See how much emergency cash an early retiree should keep before counting it as part of your long-term mix.
• Diversification is a separate layer: spreading money within each asset class. See building a globally diversified portfolio, and avoid over-diversification with too many overlapping funds.

The age-based rules of thumb, compared

None of these rules is official. They are shortcuts that turn your age into a stock percentage. Here is what each one gives you.

• 100 minus your age (oldest, most conservative): age 25 → 75% stocks · 35 → 65% · 45 → 55% · 55 → 45% · 65 → 35% · 75 → 25%
• 110 minus your age (the most-quoted modern version): age 25 → 85% · 35 → 75% · 45 → 65% · 55 → 55% · 65 → 45% · 75 → 35%
• 120 minus your age (longer lifespans / higher risk tolerance): age 25 → 95% · 35 → 85% · 45 → 75% · 55 → 65% · 65 → 55% · 75 → 45%

“Age in bonds” (John Bogle’s starting point)

• The Bogleheads wiki cites Common Sense on Mutual Funds (2010 edition, pp. 87–88), where Bogle suggests your bond percentage roughly equal your age. That puts a 65-year-old at about 65% bonds and 35% stocks, the same result as “100 minus age.”
• He was explicit that the rule “must be adjusted” for your objectives, risk tolerance and finances. He also suggested treating pension and Social Security payments as bond-like.
• His reason for holding more bonds as you get older is still the clearest summary of why age matters. As we age, he wrote, we usually have “(1) more wealth to protect, (2) less time to recoup severe losses, (3) greater need for income, and (4) perhaps an increased nervousness as markets jump around.”
• The wiki also lists the variants “(age − 10)” and “(age − 20)” in bonds, which match the 110 and 120 rules.

How to read the spread

• At 35 the rules range from 65% to 85% stocks. At 65 they range from 35% to 55%.
• A 20-point gap is a big difference in risk. The rules give you a starting range, not an answer.
• If you want a single fixed split instead of one that slides with age, our explainer on the 60/30/10 rule covers that model and when people adapt it.

What target-date fund glide paths actually do

Target-date funds (Investor.gov calls them “lifecycle funds”) are the clearest real-world version of asset allocation by age. The fund’s managers handle the allocation, the diversification and the rebalancing, and the fund becomes more conservative as its target year gets closer. The schedule it follows is called the glide path.

Vanguard’s target-date glide path (Vanguard Workplace, Target Retirement Fund and Trust)

• Age 20, early career: about 90% stocks. Vanguard says that captures growth while holding “just enough bonds to temper the worst downturns.”
• Age 40, mid-career: the fund starts to reduce stock exposure gradually.
• Age 60, transition: the fund begins adding short-term TIPS (inflation-protected Treasuries).
• Age 65, retirement: about 50% stocks.
• Age 72, withdrawal phase: the default path reaches its final 30% stocks / 70% bonds. Vanguard says its research shows 72 is the most common age to start withdrawals.
• Vanguard’s 2022 paper on its target-date approach explains the 90% stock allocation to about age 40. Most of a younger person’s eventual retirement wealth is still human capital, meaning future work earnings, so a large commitment to stocks can “balance and diversify” their exposure to those earnings. Vanguard adds that there is “no universally accepted optimal answer” on the exact equity level.

Fidelity’s index target-date funds

• Fidelity Freedom Index 2065 Fund, annual shareholder report as of March 31, 2026: 55.7% domestic equity funds, 37.3% international equity funds and 7.0% bond funds. That is about 93% stocks for someone roughly 40 years from retirement.
• At the conservative end is the Fidelity Freedom Index Retirement Fund (formerly the Freedom Index Income Fund), summary prospectus dated May 30, 2026. Its revised strategic mix is about 17% US equity funds, 11% international equity funds and 2% commodity funds. The rest is investment-grade, international, long-term Treasury and short-term inflation-protected bond funds, plus short-term funds. Fidelity expects to finish moving to this mix by the end of Q1 2027.
• Fidelity’s dated funds glide toward that end-state mix over roughly 15–20 years after their target year.

What the glide paths tell you

• In your 20s and 30s, the professional default (about 90%+ stocks) is more aggressive than “110 minus age” (85% at 25, 75% at 35).
• Both keep a meaningful stock share at and after retirement (about 50% at 65 for Vanguard), because retirement can last decades.
• A target-date fund already is your allocation; stacking other stock funds on top changes its designed mix.

What history says about each stock/bond mix

Vanguard publishes the range of calendar-year returns for 11 model mixes from 1928 through 2025 (Vanguard calculations using Morningstar data as of December 31, 2025). The stock side was 100% US through 1969 and 60% US / 40% international after that. The bond side was 100% US through 1990 and 70% US / 30% international after that. Here is each mix’s average annual return, best year and worst year:

• 100% stocks: average 11.8% · best +54.0% · worst −43.3%
• 90% stocks / 10% bonds: average 11.1% · best +48.8% · worst −39.2%
• 80/20: average 10.4% · best +43.6% · worst −35.1%
• 70/30: average 9.8% · best +38.3% · worst −31.0%
• 60/40: average 9.1% · best +33.1% · worst −26.9%
• 50/50: average 8.5% · best +31.1% · worst −22.8%
• 40/60: average 7.8% · best +29.3% · worst −18.7%
• 30/70: average 7.2% · best +27.5% · worst −14.7%
• 20/80: average 6.5% · best +28.3% · worst −14.1%
• 10/90: average 5.8% · best +30.5% · worst −13.5%
• 100% bonds: average 5.2% · best +32.6% · worst −12.9%

How to use these numbers

• Each step toward bonds gives up a little return for a lot less pain. Going from 100% to 80% stocks cut the average by 1.4 points (11.8% → 10.4%) and improved the worst year by about 8 points (−43.3% → −35.1%).
• Turn the worst year into dollars. On a $100,000 portfolio, the worst historical year was roughly a $43,300 loss at 100% stocks, $26,900 at 60/40 and $14,700 at 30/70. Ask yourself which of those you could sit through without selling.
• All-bond portfolios are not risk-free. Their worst year was −12.9%, and a 5.2% average leaves far less cushion against inflation over a long retirement.
• These are historical index figures. They are not a forecast, and they do not include fees or taxes.

Asset allocation by age: a decade-by-decade guide

Each range is a starting range drawn from the sources above: “110 minus age” at the low end and “120 minus age” at the high end, checked against the Vanguard and Fidelity glide paths. They are not personal prescriptions. In each decade, the “what matters more” items usually move your outcome more than a few points of allocation.

Asset allocation in your 20s

• Starting range: roughly 80%–95% stocks. The 110 and 120 rules give 81%–100% across ages 20–29. Vanguard’s glide path holds about 90%, and Fidelity’s 2065 fund held about 93% as of March 2026.
• What matters more: your savings rate, getting the full 401(k) match, a starter emergency fund, and not panic-selling in your first bear market. Parking retirement money in cash “until you know more” is the classic mistake; see why staying invested is less risky than not investing.
• Benchmark: net worth of a 30-year-old in the US.

Asset allocation in your 30s

• Starting range: roughly 70%–90% stocks. The 110 and 120 rules give 71%–90%, and Vanguard is still at about 90% until around 40.
• What matters more: raising contributions as income grows, the Roth vs traditional choice, and keeping a home down-payment fund out of your stock allocation (money needed in 2–3 years has a short horizon at any age). For a bonus or windfall, see dollar-cost averaging vs lump sum.

Asset allocation in your 40s

• Starting range: roughly 60%–80% stocks. The 110 and 120 rules give 61%–80%, and this is the decade when Vanguard’s glide path starts to reduce stocks.
• What matters more: peak-earning contributions, concentration risk (employer stock, RSUs, one hot sector; keep sector ETFs a satellite, not the core), and a written target you will stick to.
• Benchmarks: building wealth in your 40s · net worth of a 40-year-old in the US.

Asset allocation in your 50s

• Starting range: roughly 50%–70% stocks. The 110 and 120 rules give 51%–70%, while Vanguard’s path is heading toward about 50% at 65.
• What matters more: catch-up contributions and sequence-of-returns risk (a big loss just before or after you retire hurts far more than the same loss at 35). For 2026, workers 50+ can add $8,000 to the $24,500 401(k) limit ($32,500 total); ages 60–63 get a higher $11,250 catch-up. The IRA limit is $7,500 plus a $1,100 catch-up at 50+. See the 2026 401(k) limits guide.
• Benchmark: net worth of a 50-year-old in the US.

Asset allocation in your 60s (around retirement)

• Starting range: roughly 40%–60% stocks. The 110 and 120 rules give 41%–60%. Vanguard holds about 50% at 65 and starts adding short-term TIPS from about 60.
• What matters more: your Social Security claiming age (full retirement age is 67 if born 1960 or later; claiming at 62 cuts the benefit by about 30%, per SSA), your withdrawal rate (is the 4% rule still enough? · 4% rule calculator), and a 1–3 year cash or short-bond buffer so a bear market doesn’t force stock sales.
• Benchmark: net worth of a 65-year-old in the US.

Asset allocation in your 70s and beyond

• Starting range: roughly 30%–50% stocks. The 110 and 120 rules give 31%–50%. Vanguard’s default path ends at 30% stocks around 72, and Fidelity’s end-state Retirement Fund mix is about 28% stocks plus 2% commodities.
• What matters more: required minimum distributions, which under current IRS guidance generally start at age 73 for traditional IRAs and most workplace plans (check your birth year, since SECURE 2.0 schedules a later age for younger savers), and estate goals: money meant for heirs has their time horizon, not yours.
• Benchmark: net worth of a 70-year-old in the US.

Why age alone is the wrong input: 6 things that should move your number

Vanguard puts it directly: age “can be a helpful starting point… but it’s not the whole story,” and allocation is “ultimately driven by your time horizon and tolerance for risk, not age alone.” Investor.gov says the most common reason to change your allocation is a change in your time horizon.

• 1. Time horizon per goal, not per person. A 30-year-old saving for a house in three years and for retirement in 35 really has two allocations. Bucket by goal.
• 2. Ability, willingness and need to take risk. The Bogleheads framework, credited to author Larry Swedroe: ability (horizon, income stability, liquidity needs), willingness (would you sell in the next bear market?) and need (what return your goal requires). Swedroe suggests taking the lowest stock allocation of the three.
• 3. Job stability. A steady, bond-like paycheck (say, a tenured teacher) can support more stocks; a founder or a tech worker paid in company stock already carries equity-like risk.
• 4. Pensions and Social Security. Bogle suggested counting them as bond-like, so a retiree whose essential bills are covered can often hold more stocks than “100 minus age.” Some Bogleheads leave them out. Pick one approach and stay consistent.
• 5. Portfolio size vs needs. Ample savings reduce your need for risk. If you are behind, a higher savings rate is a more reliable fix than more stock risk.
• 6. Early retirement. Money that must last 45-plus years can run short if the mix is too conservative. See the FIRE movement explained.

Where your stocks and bonds live: 401(k), IRA, Roth, HSA and taxable

The Bogleheads wiki makes a point many investors miss: your allocation applies to your whole portfolio, so each account does not need the same mix.

• Add up every account and check the combined split. Use the 401(k) menu for what it does best (often a low-cost S&P 500 or bond index fund) and fill gaps in your IRA.
• Account choice first: 401(k) vs IRA, Roth vs traditional IRA, 2026 HSA limits.
• Wrapper second: index fund vs ETF matters most in taxable accounts, where rebalancing can also trigger capital gains tax. Inside an IRA or 401(k), it doesn’t.

Simple ways to put your allocation into practice

• One fund: a target-date fund. Pick the year nearest your expected retirement. Check the expense ratio and whether the fund glides “to” or “through” retirement (Vanguard’s adjusts until about 72). For more or less risk, choose a later or earlier year.
• One fund: a balanced fund with a fixed mix such as 60/40 (it won’t change as you age).
• Two funds (Bogle’s preference): per the Bogleheads wiki, Bogle often suggested a US total stock market index fund plus a US total bond market index fund.
• Three funds (popular with Bogleheads): US total stock, total international stock and US total bond; some add TIPS as a fourth.
• Core plus satellites: a broad index core (S&P 500 guide) plus a small, capped slice for themes. For the keep-it-simple case, see The Simple Path to Wealth and Millionaire Teacher.
• Watch costs: check advisory fees with the financial advisor fee calculator.

Rebalancing: keeping your allocation from drifting

Markets move your allocation even when you do nothing:

• Start with $60,000 in stocks and $40,000 in bonds (60/40).
• Stocks rise 20% and bonds are flat. You now hold $72,000 in stocks out of $112,000, or about 64.3% stocks.
• Getting back to 60% means moving about $4,800 from stocks to bonds, or sending new contributions to bonds until the mix is restored.

• When (Investor.gov): on the calendar (many experts suggest every six or twelve months) or when an asset class drifts past a threshold you set in advance, such as 5 points. Either way, rebalancing “forces you to buy low and sell high.”
• How: use new contributions and dividends first, and rebalance inside tax-advantaged accounts where you can.

Common asset allocation mistakes at every age

• Too much cash when young. Inflation and missed compounding are the risk (try the compound interest calculator).
• Stacking other stock funds on a target-date fund.
• Changing course on headlines. The Bogleheads wiki: change your strategic allocation for life events, not market conditions.
• Copying a famous investor without context. In his 2013 shareholder letter, Warren Buffett said his will tells the trustee of a cash bequest for his wife’s benefit to put “10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.” That is advice for a very well-funded trust, not a rule for every 70-year-old. More in Buffett’s record and lessons.
• No cash or bond buffer in the five years around retirement, when sequence risk is highest.

Frequently asked questions

What is a good asset allocation for my age?

A common start is 110 minus your age in stocks: subtract your age from 110 (75% at 35, 45% at 65) and hold the rest in bonds and cash. Target-date funds are more aggressive early: Vanguard holds about 90% stocks until around 40 and about 50% at 65. Then adjust for your time horizon, job stability, pension or Social Security income, and how you would handle a 30%–40% drop.

Is 120 minus your age too aggressive?

Not necessarily. It gives 85% stocks at 35, close to Vanguard’s 90% at that age, and 55% at 65, a little above Vanguard’s 50%. In Vanguard’s 1928–2025 data, mixes from 90/10 down to 50/50 had worst calendar years of −39.2% to −22.8%. “Too aggressive” means more risk than you can hold through.

What asset allocation does Vanguard recommend by age?

Its target-date glide path holds about 90% stocks early, starts reducing at about 40, reaches about 50% at 65 and ends at 30/70 around 72. Vanguard adds that allocation depends on “time horizon and tolerance for risk, not age alone.”

Should a 60-year-old be 100% in stocks?

For most people near retirement, no. An all-stock portfolio’s worst year in Vanguard’s 1928–2025 data was −43.3%, and a loss like that just before withdrawals begin can permanently lower sustainable income. Some retirees with fully covered spending, or investing for heirs, choose it deliberately.

Does a target-date fund handle asset allocation for me?

Yes, if it’s your only holding. Investor.gov notes the fund’s managers handle allocation, diversification and rebalancing. Check its glide path, expense ratio and “to” vs “through” design.

Do Social Security and pensions count as bonds?

Bogle suggested treating them as bond-like, so a retiree with large guaranteed income could hold more stocks. Others leave them out to stay conservative. Either is defensible if you apply it consistently.

How often should I rebalance?

Investor.gov notes many experts suggest every six or twelve months, or when an asset class drifts past a threshold you set. Rebalancing with new money and inside IRAs and 401(k)s keeps taxes and trading low.

Bottom line

• Use age as a starting range: about 110 minus age in stocks, or 120 minus age if your income is stable and you’ve held through a crash before.
• Professional glide paths start higher (about 90% until around 40), land near 50% at 65 and end near 30% in the early 70s.
• Turn your mix’s worst historical year into dollars and make sure you could sit through it.
• Treat all accounts as one portfolio, keep money for goals under five years away separate, rebalance on a schedule, and re-check after big life events. The best allocation is the one you’ll still hold after the next bear market.

Disclaimer

This article is for educational purposes only. It is not investment, tax or legal advice, or a recommendation to buy or sell any security or fund. Historical returns are index-based, exclude fees and taxes, and do not guarantee future results. Limits, RMD ages and fund allocations change; confirm current figures with the IRS, SSA, Investor.gov and fund prospectuses, and consider a qualified fiduciary professional.