Asset Allocation Calculator
Asset Allocation by Age Calculator
The equity and debt split that the common age-based rules of thumb (100, 110 or 120 minus your age) would give, side by side, and the amounts for your portfolio. Rules of thumb, not advice.
Equity share by rule of thumb
Age 35, using 110 − age, with a $10,00,000 portfolio
The age-based rules of thumb
- N = 100
- the same arithmetic as Bogle’s “your age in bonds”
- N = 110, 120
- later variants that hold more equity at every age; no documented origin was found
- amounts
- portfolio value × each percentage
Worked example
Age 35, using 110 − age, with a $10,00,000 portfolio
110 − 35 = 75% in equity, 25% in debt
Side by side: 100 − age gives 65%, 120 − age gives 85%
Amounts: $7,50,000 in equity and $2,50,000 in debt
Equity share by age under each rule of thumb
| Age | 100 − age | 110 − age | 120 − age |
|---|---|---|---|
| 25 | 75% | 85% | 95% |
| 35 | 65% | 75% | 85% |
| 45 | 55% | 65% | 75% |
| 55 | 45% | 55% | 65% |
| 65 | 35% | 45% | 55% |
| 75 | 25% | 35% | 45% |
Where these rules come from, and what they leave out
The best-known age rule is John Bogle’s: hold roughly your age in bonds. In Common Sense on Mutual Funds he wrote that “an investor’s bond position should be equal to his or her age”, so a 35-year-old would hold 35% in bonds and 65% in shares. “100 minus your age in equity” is the same arithmetic. The 110 and 120 versions keep 10 and 20 more percentage points in equity at every age; we could not find a documented origin for them, and they are best read as later variations in personal-finance writing. Benjamin Graham, earlier still, told a defensive investor to keep between 25% and 75% in shares, with 50–50 as the standard. None of these was derived for any particular country, tax system or inflation rate.
At 35 the three rules give 65%, 75% and 85% in equity. The chart shows how each falls by one point a year. What they share is the idea that someone with more working years ahead can wait out a fall in share prices, and someone near retirement has less time to recover. What they leave out is everything specific to you: how secure your income is, when you need the money, what else you own (a house, EPF or PPF balances are debt-like), your loans, and how you would act if your portfolio fell by a third. Two people of the same age can sensibly hold very different mixes.
In India, every mutual fund scheme carries SEBI’s risk-o-meter, which rates it on six levels from Low to Very High, so you can see how risky the funds you pick for each part are. A SEBI-registered investment adviser has to assess your risk profile and the suitability of what they recommend, which is the tailoring a rule of thumb cannot do. Keep an emergency fund outside this split: see the emergency fund calculator. To add up what you own, use the net worth calculator; for retirement, the retirement corpus calculator. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
What is the 100 minus age rule?
Hold 100 minus your age as a percentage in equity and the rest in debt: 65% equity at 35. It is the same arithmetic as John Bogle’s “your age in bonds”.
Why do some people use 110 or 120 minus age?
To hold more equity at every age, usually with longer lives and retirements in mind. We could not trace a documented origin for these versions; treat them as rough variations, not research findings.
Which rule should I follow?
The page does not recommend one. Your income, goals, time horizon, other assets and reaction to losses matter more than your age. A SEBI-registered investment adviser can assess these for you.
Does debt include my EPF, PPF or fixed deposits?
They are debt-like, so many people count them in the debt share. The rules of thumb do not say; decide consistently and include them in the portfolio value if you do.
Related calculators
References
- Bogle JC. Common Sense on Mutual Funds. 10th anniversary ed. Hoboken, NJ: Wiley; 2010:87–88. “An investor’s bond position should be equal to his or her age.”
- Graham B. The Intelligent Investor. Revised ed. New York: HarperCollins. Chapter 4: a defensive investor should keep between 25% and 75% in stocks, with 50–50 as the standard division.
- SEBI circular SEBI/HO/IMD/DF3/CIR/P/2020/197, 5 October 2020: Product Labeling in Mutual Fund schemes – Risk-o-meter. Six levels, from Low to Very High.
- SEBI (Investment Advisers) Regulations, 2013: investment advice for a fee may be given only by a SEBI-registered investment adviser, after a risk profile and a suitability assessment of the client.