What "110 − age" means
A commonly discussed simplification in the asset allocation literature is:
Stock percentage (%) ≈ 110 − age
For example, a 30-year-old would hold about 80% stocks, a 50-year-old about 60%, a 70-year-old about 40%. The remainder typically goes to lower-volatility categories such as bonds.
The idea behind the rule is that the longer your remaining investment horizon, the more buffer your portfolio has to absorb market swings, so a higher share of volatile assets can be tolerated. As you age, the time available to wait for markets to recover shrinks, and the less volatile portion of the portfolio is usually increased.
Why 110 instead of something else
An earlier widely cited version was "100 − age". Later, as average life expectancy rose and retirements started spanning decades, much of the literature shifted to 110 or even 120 as the benchmark. The change reflects "longer investing horizon", not "you should be more aggressive".
Limitations of the rule
The rule is simple to use but does not fit every situation. A few limitations commonly raised in public discussion:
- Ignores income stability: civil servants, salaried employees, and self-employed workers face very different income volatility; two people of the same age may tolerate very different portfolio volatility
- Ignores purpose and horizon of the money: even for the same person, money earmarked for a home purchase within 5 years and retirement capital for 30 years call for different category splits
- Ignores cash needs: whether your emergency fund and insurance coverage are adequate affects how much volatility you can absorb
- Single variable oversimplifies: real decisions usually need to consider interest-rate environment, taxes, family responsibilities, and more
Using it as a reference tool
You can treat "110 − age" as a starting point — a fast way to get a baseline ratio, then adjust from there based on your personal situation. For example, calculate an initial ratio and then nudge it up or down based on your income stability, emergency fund status, and short-to-long-term capital needs.
The calculator on this site uses this rule as its base formula and layers on a simple risk-tolerance adjustment. The results are purely arithmetic and do not constitute investment advice.