Asset allocation calculator
A starting split between growth and defensive assets based on your age, your horizon and how you actually behave in a fall.
Growth assets
82%
147,600 of 180,000, with 27 years to retirement
- Defensive assets
- 18%
- In growth
- $147,600
- In defensive
- $32,400
| Rule of thumb (120 − age) | 82% |
|---|---|
| Risk adjustment (balanced) | 0% |
| Growth allocation | 82% |
At 38 the 120-minus-age rule puts 82% in growth assets — 27 years is long enough to sit through several falls.
How this is calculated
How this is calculated
120 minus age, not 100
The older rule of 100 minus age was written when retirements were shorter and bonds paid more. With a 30-year retirement, holding 65% bonds at 65 risks running out of money rather than protecting against a fall.
growth % = 120 − age ± 10 for riskThe risk adjustment is deliberate, not a quiz
Answering "badly" moves the split 10 points toward defensive, "I buy more" moves it 10 points toward growth. A split you will actually hold through a 30% fall beats an optimal one you sell at the bottom.
Worked example: Age 38, retiring at 65, $180,000 invested
| Age | 38 |
|---|---|
| Horizon | 27 years |
| Risk | Balanced |
| Growth | 82% — $147,600 |
|---|---|
| Defensive | 18% — $32,400 |
The same person at 60 gets 60/40. The shift is gradual: about one point of growth traded for defensive every year.
What this assumes
- The money is for retirement, not a nearer goal.
- Growth means diversified equities, not single stocks.
- Defensive means high-grade bonds and cash.
- You will rebalance back to the split periodically.
Where this commonly goes wrong
- A rule of thumb cannot see your other assets: a defined-benefit pension or an investment property already acts like a large bond holding.
- Home-country bias is the most common allocation error — a 100% domestic equity sleeve is far less diversified than the growth percentage suggests.
- Cash held for a house deposit in three years should sit outside this entirely; it is not part of a retirement allocation.
Questions
What is a good asset allocation by age?
A common starting point is 120 minus your age in growth assets: 82% at 38, 70% at 50, 55% at 65. It is a default to depart from deliberately, not a rule, and your other assets should change it.
Why has the rule changed from 100 minus age?
Retirements are longer and bond yields spent a decade near zero. Holding 65% bonds from 65 through a 30-year retirement makes running out of money the bigger risk than a market fall.
How do I keep the split from drifting?
Check it once a year and correct anything more than about five points off target. Direct new contributions at whichever side is underweight — that keeps the allocation honest without selling anything.
Does a home count as a defensive asset?
No. A home you live in is not part of an investment portfolio — you cannot sell part of it to fund a year of retirement. An investment property is closer to a growth asset with leverage attached.
What about international versus domestic?
This split says nothing about geography, and geography is where most portfolios go wrong. A growth sleeve concentrated in one country carries risk the allocation percentage does not show.
Should I go 100% growth when I am young?
Arithmetically it is defensible with a 30-year horizon. Behaviourally it only works if you can watch a third of the balance disappear without selling — which is exactly what the risk question here is asking.
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Sources
This calculator does arithmetic on the figures you enter. It does not account for tax, fees, or your personal circumstances.
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