Stock and Bond Allocations by Age

Building a portfolio often involves adjusting stock and bond allocations by age to reflect changing financial goals and risk tolerance. While age is only one of several factors that drive asset allocation decisions, investors of a similar age frequently have portfolios that resemble each other in important ways. Younger investors typically hold a higher percentage of stocks to pursue long-term growth, whereas those approaching retirement may shift toward bonds for greater income and stability. Understanding how allocation typically evolves with age can help align investments with different life stages and market conditions.

A financial advisor can help you allocate your portfolio according to your goals without you having to constantly adjust for market fluctuations.

About Age-Based Asset Allocations

Age-based asset allocation rests on the idea that over time, investors experience a decline in risk capacity, not just risk tolerance. That is, younger investors typically have a long time horizon, which allows them to recover from market downturns. Retirees, on the other hand, often need more liquidity and stability to fund withdrawals. However, the principles behind asset allocation extend beyond simply adjusting based on age.

A key consideration is sequencing risk—the danger of experiencing portfolio losses just before or during the early years of retirement. For this reason, many investors gradually shift their emphasis toward bonds, aiming to build a more resilient portfolio before withdrawals begin. Another principle is diversification across asset classes which respond differently to economic conditions, rather than assuming a simple stock-to-bond split will suffice.

Finally, investors often think in terms of “buckets“—separating assets into short-, medium- and long-term pools to align with different spending timelines. This approach helps manage both emotional responses to market volatility and the practical need for dependable cash flow across a retirement that could last decades.

Stock/Bond Allocation By Age

Asset allocation is not a static decision; it evolves as investors move through different stages of life. While younger individuals often prioritize long-term growth with heavier stock allocations, those closer to or in retirement typically shift toward more stable, income-producing investments.

Factors such as career development, family obligations, market conditions and retirement planning timelines all play a role in how stock and bond allocations adjust over time. Here’s a closer look at how stock and bond allocations typically evolve from the 20s through the 80s.

In Your 20s: Focus on Growth

In your 20s, a stock-heavy portfolio often makes sense because you have decades to recover from the inevitable downturns in the markets. Allocations of 80% to 100% stocks and 0% to 20% bonds are common. Growth-focused investments, such as broad market index funds and emerging markets, may be favored because they offer higher long-term returns. Although bonds may seem unnecessary at this stage, a small allocation can add stability during market turbulence without significantly limiting growth potential.

In Your 30s: Balancing Growth and Stability

During your 30s, many still maintain a growth-oriented strategy, typically allocating 70% to 90% to stocks and 10% to 30% to bonds. Career advancement and increasing income may also allow for larger investments. Some individuals begin introducing more bonds to reduce volatility, especially as major expenses like home purchases or family planning approach. Flexibility in adjusting allocations becomes more valuable as financial responsibilities increase.

In Your 40s: Moderating Risk

In your 40s, risk management starts to take greater priority. A typical stock and bond allocations might range from 60% to 80% stocks and 20% to 40% bonds. While growth remains a goal, many investors begin shifting a portion of their portfolio into more stable, income-producing assets. Retirement savings often accelerate during these years and reducing the potential for large market losses becomes more of a focus.

In Your 50s: Shifting Toward Preservation

By your 50s, protecting accumulated wealth often drives a gradual shift to 50% to 70% stocks and 30% to 50% bonds. Retirement may be within a decade, prompting some to reduce exposure to major market downturns. Portfolios during this stage may include a greater mix of dividend-paying stocks and high-quality bonds to provide a balanced blend of growth and income. Some also consider target-date funds tailored to their expected retirement year.

In Your 60s: Preparing for Retirement Withdrawals

In your 60s, investment strategies typically emphasize stability and income, with stock allocations often ranging from 40% to 60% and bonds making up 40% to 60%. The goal is to limit major losses while providing enough growth to sustain a long retirement. Some investors keep a modest stock position to help outpace inflation, while relying more on bonds, cash reserves and other conservative investments for near-term expenses.

In Your 70s: Managing Longevity Risk

Once you reach your 70s, the allocation might shift to between 30% to 50% stocks and 50% to 70% bonds. Required minimum distributions (RMDs) from tax-deferred retirement accounts typically begin, increasing the need for liquid, lower-volatility assets. Many investors prioritize stable income sources, such as bond ladders and dividend-paying stocks, while maintaining a smaller equity allocation to support portfolio growth over a potentially extended retirement.

In Your 80s: Prioritizing Stability and Income

In your 80s, portfolio construction often emphasizes low volatility and predictable cash flow. Allocations may center around 20% to 40% stocks and 60% to 80% bonds. Riskier assets usually make up a small portion of the portfolio, while investments focus heavily on income-producing bonds, cash equivalents and highly stable equities. Flexibility to cover healthcare costs and other unexpected expenses becomes an increasingly significant factor in how assets are structured.

Bottom Line

Stock and bond allocations often reflect a balance between growth ambitions and the realities of changing financial needs over time. While younger investors may benefit from greater market exposure, older investors typically focus more on generating reliable income and protecting principal. Adjustments to a portfolio tend to follow broader patterns tied to life stages, but personal goals, market conditions and evolving risk tolerance can shape the specifics for each individual.

Tips for Portfolio Management

Managing your portfolio takes patience, knowledge and dedication to make sure you’re saving what you need to reach your long-term goals. A financial advisor can help you better understand your portfolio and what your investment needs are at any point in time. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Utilizing an asset allocation calculator can help you determine the mix of your portfolio.