This tool applies the classic age-based rule of thumb: subtract your age from a constant, and the result is the share of your portfolio held in stocks, with the remainder in bonds and cash. It is not a personalised recommendation, but it is a fast way to sanity-check whether your current mix is roughly in line with the glide path most target-date funds already follow.
Where the '110 minus age' constant comes from
Older guidance used 100 minus your age, which pushed a 40-year-old to a 60/40 stock/bond split. As life expectancy rose and bond yields fell, many advisers and target-date fund providers shifted to 110 or 120 minus age, which keeps more money in growth assets for longer.
There is no regulator-mandated formula here; it is a heuristic, not a law. Vanguard and Fidelity target-date series both hold higher equity weightings at a given age than the original 100-minus-age rule implied, which is why 110 or 120 constants now show up more often in retail guidance.
A useful benchmark: at 30 with a 110 constant, the rule suggests 80% stocks; at 50, 60% stocks; at 70, 40% stocks. If your actual holdings are more than about 15 percentage points away from that line in either direction, it is worth asking why.
Three worked examples
A 28-year-old using the 120 constant gets 120 - 28 = 92% stocks, 8% bonds. On a 45,000 portfolio that is 41,400 in stocks and 3,600 in bonds and cash — an allocation that assumes decades to recover from a market downturn.
A 52-year-old using the traditional 100 constant gets 100 - 52 = 48% stocks, 52% bonds. On a 310,000 portfolio that splits to 148,800 in stocks and 161,200 in bonds, a mix that leans defensive because retirement is roughly a decade away.
A 74-year-old using a 110 constant gets 110 - 74 = 36% stocks, 64% bonds. On an 800,000 portfolio that is 288,000 in stocks and 512,000 in bonds. Because the formula floors at zero and caps at 100, nobody past their rule constant is pushed into a negative stock allocation; the calculator holds the split at 0% stocks once age exceeds the constant.
What the formula ignores
The rule only looks at one input, age, and treats every 50-year-old as identical. It has nothing to say about your actual retirement date, other income sources such as a pension or rental property, your risk tolerance, or debts that behave like a negative bond position.
It also lumps 'bonds' together as if duration and credit quality do not matter. Long-dated government bonds, short-term treasuries and high-yield corporate debt carry very different risk, so the bond side of the split still needs its own decisions once you have the headline percentage.
The formula says nothing about sequence-of-returns risk in the years right before and after retirement, which is often the single biggest driver of whether a portfolio lasts. A rule-of-thumb split does not substitute for stress-testing withdrawals against a bad first few years of returns.
Account type and tax-year timing
In the US, holding bonds inside a tax-advantaged account such as a 401(k) or traditional IRA and equities in a taxable brokerage account (asset location) can reduce the drag from interest being taxed as ordinary income, even when the overall stock/bond split matches this rule.
UK savers doing the same exercise across an ISA and a workplace pension should remember that ISA contributions reset every 6 April, so a rebalancing trade that would breach this year's ISA allowance may need to wait for the new tax year or be done inside the pension wrapper instead.
Rebalancing to match a target percentage can trigger capital gains tax outside a sheltered account in both countries, so a portfolio that is close to the target split may not be worth disturbing purely to hit the number exactly.
Frequently asked questions
- What is the 110 minus age rule?
- It is a rule of thumb for setting your stock allocation: subtract your age from 110, and hold that percentage in stocks, with the rest in bonds and cash. A 45-year-old following it would hold 110 - 45 = 65% in stocks and 35% in bonds.
- Is 100 minus age or 110 minus age more accurate?
- Neither is 'accurate' in a testable sense; they are competing conventions. 100 minus age produces a more conservative, lower-equity split at every age, while 110 or 120 minus age keeps more in stocks, reflecting longer life expectancies and the historically higher long-run return on equities versus bonds.
- Should retirees have 0% in stocks?
- The formula only reaches 0% stocks once your age equals or exceeds the rule constant, for example at 110 with the 110-minus-age version. Most retirement-income research still recommends keeping some equity exposure well into retirement to outpace inflation over a 20-30 year drawdown period, so a literal 0% at that age is a starting point for discussion, not a target.
- How often should I rebalance to match my target allocation?
- A common approach is to check once or twice a year, or whenever an asset class drifts more than about 5 percentage points from target, rather than reacting to daily price moves. Rebalancing too often inside a taxable account can generate avoidable capital gains tax.
- Does this rule account for a pension or Social Security?
- No. The calculator only uses age, a rule constant and your portfolio value, so it cannot see guaranteed income such as a defined-benefit pension or Social Security, both of which behave like a bond and can justify holding more equities elsewhere in the portfolio than the raw formula suggests.
- What counts as 'bonds and cash' in this split?
- The calculator treats bonds and cash as one combined non-stock bucket. In practice that bucket might mix short-term treasuries, investment-grade corporate bonds, money-market funds and a cash emergency fund, each with different risk and liquidity, so the single percentage here is a starting allocation rather than a finished bond portfolio.
Sources
- U.S. Securities and Exchange Commission — Investor.gov, asset allocation — SEC investor-education guidance describing age, goals and risk tolerance as the standard inputs to an asset-allocation decision (accessed 2026).
- Social Security Administration — full retirement age — SSA table of full retirement age by birth year, relevant when timing a portfolio's shift toward bonds ahead of a claiming date (accessed 2026).
- HM Revenue & Customs — Individual Savings Accounts (ISA) rules — Confirms the UK ISA allowance resets each 6 April tax year, relevant to timing rebalancing trades across ISA and pension wrappers (accessed 2026).