Subtract Your Age From 110 To Figure Out How Much Of Your Portfolio Should Be In Stocks Vs Bonds

With the Feds buying up more Treasuries, bonds are looking attractive. But how much of my portfolio should I have invested in bonds? What’s the proper asset allocation between stocks and bonds? Well, an old-school rule of thumb is that you subtract your age from 110.

So if you’re 28, 110 minus 28 is 82. That means you should have 82% of your portfolio in stocks, and 18% in bonds.

If you’re feeling more conservative, subtract from 100. More aggressive, 120.

These are just general guidelines not hard and fast rules, always invest (or not invest) based on your individual goals and resources.


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  1. Magspie says:

    Hmm. My six year old has a few stocks. What percentage should he have in bonds?

    • adamstew says:

      Accoring to thee guidelines, -4%. So sell some bonds to your friends and family and put that money in to his stock portfolio.

      • Magspie says:

        Ooh, good idea. I’ll tell him to get on that. I’m sure he’s much better at selling than I am.

  2. Alvis says:

    This is worded in a very confusing (and a bit incorrect) manner.

  3. sevatt says:

    You math is confusing. You state: “Subtract Your Age From 110 To Figure Out How Much You Should Have In Bonds”. If I’m 28, 110 minus 28 is 82. I should have 82 bonds? You then go on to say I should have 18% bonds. Would it not be easier to say: “Subtract 10 from your age to figure out how much you should have in bonds”? 28 minus 10 is 18.

    • Zerkaboid says:

      Or just say 110 minus your age is how much you should have in stocks. The wording of the article is rather confusing.

  4. pantheonoutcast says:

    18% of what? My portfolio? My income? My net worth?

  5. FatLynn says:

    You know, up until the mid-90’s, the rule of thumb was 100 – your age.

  6. Loias supports harsher punishments against corporations says:

    In a fit of twisted irony, I literally turned 28 today…

    Creepy, right? I guess I should get some bonds?

  7. Meano says:

    Stocks. Popken screwed up the title but got the description right. Age go up; risk come down.

    Six months income in cash, (110-age)% in stocks and the rest in fixed income.

    Bond prices move in the opposite direction of interest rates, so either (1) find a way to buy and hold “whole bonds” or (2) understand if you buy a bond mutual fund that you are making a bet on flat/declining interest rates.

  8. Nigerian prince looking for business partner says:

    “So if you’re 28, 110 minus 28 is 82. That means you should have 82% of your portfolio in stocks, and 18% in bonds.”

    Is it just me or does 18% in bonds seem incredibly conservative for somebody that young?

    • SpendorTheCheap says:

      It all depends on how you think the market is going to perform. It seems conservative to me, too, but maybe not overly. I’m 38, have about 15% in Bonds. I wished I had more than over the last few years as the market went from 14000 to 7000 to 10000.

    • xxmichaelxx says:

      It does seem a little conservative, but it’s not a bad idea to keep 15-20% in bonds (even in an aggressive portfolio) for when/if the market takes a dive. That was my situation in 2008 — I’m all in now, and much better for it.

  9. A Pimp Named DaveR says:

    I am six years old. What you suggest is mathematically impossible….

    But seriously, folks — I think the important thing to remember is that this is just a rule of thumb, not a hard and fast “YOU MUST DO THIS!!!!! AND ONLY THIS!!!!!” thing. If you have a known large expenditure coming up that will require dipping into your investments (such as a child entering college, or a new home purchase) you should keep the money you need for that purpose in a low-risk investment like Treasuries. And your personal risk tolerance should come into play, too.

    • Meano says:

      Admittedly, you will have trouble getting to 104% stocks without leverage. So you’ll need to go with E*Trade’s new “Margin Accounts for First Graders” program.

      Ask a grownup to open your account now get a free E*Trade Speak-‘N’-Spell. (The cow says, “limit order.”)

  10. segfault, registered cat offender says:

    100 minus your age was the standard until the most recent run-up in the 1990s and 2000s, so a lot of people adjusted the benchmark so they could feel comfortable investing more in the market. I still use 100 minus my age.

  11. trephined says:

    Ok, so we are working with percentages here. Regardless of the 100/110, or the stocks/bonds debate from the poor writing of this article, why is everyone overlooking this one obvious thing.
    Just subtract 10 from your age. Done. No add this, subtract that, multiply the other.

    I’m 25, minus 10 = 15% bonds. Remainder stocks
    If you follow the 100 rule from yesteryear, 25% bonds.

  12. tinyhands says:

    This is a terrible rule of thumb and it does not apply anymore. Bond yields are currently at all-time lows. When yields go up, as they eventually will, the value of those bonds goes down. Thus, you’re recommending that people buy something guaranteed to lose value! Anyone with an investment time-horizon greater than 15 years should be 100% in stocks. Diversifying within stocks (i.e. small-caps vs. large vs. international, etc) can and should be used to manage risk tolerance, but buying bonds right now is a TERRIBLE idea. I get that the stock market is a scary place right now, believe me, I get it. But now is just as good a time as any to buy in and stay in. If you “wait until the market recovers” you’ve already missed it.

    Please, no more outdated financial advice!

    • El Matarife says:


    • costanza007 says:

      however, the risk you’re attempting (in your example) to diversify against is institutional risk, not systemic risk so if you have some of each type of stock and the entire market moves in the same direction, you’re going to lose value. bonds aren’t sexy, but the overall volatility is what you’d be trying to protect against in your later years. either that or just bet everything on double zeros.

      • tinyhands says:

        True. I think we’re also talking about two different sets of investors, the young and the old. Young investors have no business worrying about systemic risk, unless they’re going to keep their 401k under the mattress, which recent studies suggest they are figuratively doing by seeking less risk despite long investment horizons. Older investors should definitely protect against systemic risk, but bonds purchased today can only benefit an investor if held to maturity. Otherwise, interest rate risk (primary downside to getting into bond funds at this point) overwhelms systemic risk and the older investor (with a much shorter time horizon) is better off with short term CDs.

  13. two_handed_economist says:

    Sorry, this post has bigger problems: “With the Feds buying up more Treasuries, bonds are looking attractive. ” Really? When the Fed buys bonds, interest rates (yields) on them are pushed DOWN. That’s attractive to you?

    Stocks vs. bonds? How about real estate? How about personal loans — e.g. Lending Club? Providing seed money to small businesses? How about short-term hoarding of cash — dollars, euros, other? How about holding commodities?

    • NeverLetMeDown says:

      “Sorry, this post has bigger problems: “With the Feds buying up more Treasuries, bonds are looking attractive. ” Really? When the Fed buys bonds, interest rates (yields) on them are pushed DOWN. That’s attractive to you?”

      Yes, if you’re not looking at them for the coupon, but for capital appreciation. If the Fed buys more bonds, then bond prices go up, benefiting bondholders.

  14. INsano says:

    Old school rules of thumb also say housing always increases in value.

    Unquestioning acceptance of “old school rules of thumb” causes problems when everyone does it.

    If 2008 taught you nothing other than to think for yourself it was worth it.

  15. ss60 says:

    this is oversimplified of course and designed for lazy investors, if retirement is way off and the stock market is down then buy all stocks, THEY ARE ALREADY DOWN, making it a great time to buy since you can wait it out, plus as others have said bond yields are horrible right now

    • fredmertz says:

      nice! You just countered simplified advice with the next best thing — dumb simplified advice!

  16. slimeburg says:

    these rules of thumb are not really that useful because they only take one small part of the picture into account. Do you really think the rule should be the same for a 28 year old with a six figure income who inherited a house free and clear as it would be for a 28 year old who makes $30k and rents? What about a 28 year old with a seven figure liquid net worth – he would probably want more in low risk investments because accumulation/growth is less of an objective than preservation and income. Following these rules of thumb is a good way to make a mistake.

  17. fredmertz says:

    Everything about this rule of thumb is ridiculous. A 70 year-old should not have 40% of their portfolio in stocks. Horrible, horrible advice. It’s as if the last 3 years never happened.

  18. thisistobehelpful says:

    Or perhaps maybe we shouldn’t tell people to gamble for their future. It’s the same as sticking your money in a casino really. One good crash and boom, destitute.

  19. NydiaGeben says:

    Want to get rich? 98% stocks… 2% cash. … 0% bonds. …

  20. donovanr says:

    “With the Feds buying up more Treasuries” is a key line. If they are buying up bonds then they are printing money. More money will eventually mean more inflation and more inflation will make existing bonds worth less. Some bonds are inflation adjusted but this will only protect you as far as to how accurately the government will report inflation.
    What you are looking for as you retire is continued income which most bonds will provide. But there are other options; such as dividend paying stocks, rental income, owning a stake in a private company, etc.
    Lastly with all the boomers buying into bonds in a big way as they retire it will increase demand for bonds which will decrease their yields and will also result in a big pile of money that will also be known as a bubble. Bubbles pop. “Oh you put your retirement income into bonds backed by someone who claimed to be able to turn lead into gold.”

  21. Mr. TheShack says:

    Here is a hint. Don’t invest in bonds. It’s a waste of time. I work a part-time job and keep my investments in stocks. Easy money.

  22. Hands says:

    Utter nonsense. Here’s a better rule of thumb: start paying attention to your investments, whatever they are. Treat your money like it’s actually important to you.

  23. smartmuffin says:

    Monetizing our debt makes bonds MORE attractive? Seriously? The way most economists are viewing the market right now, I’d say the ideal portfolio is 20% food and seeds, 20% gold, and 60% guns and ammo…

  24. RogueWarrior65 says:

    I wouldn’t go near the bond market these days. There’s a big article in today’s WSJ about how so much wealth has shifted to the bond market that it will eventually be yet another bubble bursting.

  25. Captain Packrat says:

    And if you happen to be Eugenie Blanchard, 114 years young?