Asset Allocation Calculator — Find Your Ideal Stock/Bond Ratio
Try this asset allocation calculator to determine your ideal stock-to-bond-to-cash retirement portfolio investment allocation. Read the instructions and methodology below.
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Disclaimer
This asset allocation calculator is intended for informational and educational purposes only.
It provides "rule of thumb" calculations based on age and risk tolerance but does not consider other important factors such as individual financial goals, income needs, tax considerations, or market conditions.
The results should not be considered financial advice. Please use this tool as a starting point for further research. Consult with a qualified financial professional if you are not comfortable making personalized investment decisions.
Methodology: How This Calculator Works
This asset allocation calculator provides a simple way to estimate a mix of stocks, bonds, and cash based on your age and risk tolerance.
It follows a widely used rule of thumb for investing but should be used as a general guide rather than a strict formula.
How Allocations Are Determined
The calculator starts with a basic approach known as the "Minus Your Age" or "120 rule":
- Your stock allocation is determined by subtracting your age from the following:
- Aggressive risk tolerance - 140
- Moderate risk tolerance - 130
- Conservative risk tolerance - 120
- The remaining percentage is allocated to bonds.
- A portion of the bond allocation is shifted to cash based on your risk tolerance and age group.
Cash Allocation Adjustments
- Cash and equivalents (such as savings, money market funds, or short-term bonds) provide stability.
- The percentage of cash increases as you age and varies by your selected risk tolerance:
- Conservative investors hold more cash and bonds.
- Moderate investors hold a balanced portfolio.
- Aggressive investors hold little to no cash and more stocks vs. bonds.
Step-by-Step Calculation Process
- Enter your age.
- Your Stock Allocation is calculated as Assigned risk tolerance value (120, 130, 140) - Age.
- Your Bond Allocation is initially set as 100 - Stock Allocation (for a 100% allocation total).
- Select your risk tolerance.
- Conservative, Moderate, or Aggressive. Based on your choice, a percentage of bonds is shifted into cash according to the following rules:
Age Range | Conservative | Moderate | Aggressive |
---|---|---|---|
49 & below | 3% cash | 0% cash | 0% cash |
59 & below | 5% cash | 3% cash | 0% cash |
60-69 | 8% cash | 5% cash | 3% cash |
70-79 | 15% cash | 10% cash | 5% cash |
80-89 | 25% cash | 20% cash | 15% cash |
90+ | 40% cash | 30% cash | 25% cash |
- Final allocation adjustments.
- The cash portion is deducted from bonds, so the total always adds up to 100%.
- The final allocation is displayed in both percentage values in the table and a pie chart. Hover over the pie chart to see the labels in the chart.
What This Means for You
- Younger investors are typically assigned more stocks because they have a longer time to recover from market downturns.
- Older investors are given a higher percentage of bonds and cash to reduce risk and provide stability.
- Risk tolerance plays a role in how much cash is included — conservative investors hold more cash, while aggressive investors hold almost none.
This is just a guideline — real-world investing involves additional factors such as personal goals, life expectancy, income needs, and market conditions.
Use this calculator as a starting point for deeper financial planning.
Feedback?
Let me know what you think in the comments. This is an estimation tool that will likely be refined over time.
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