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The “100 Minus Your Age” Rule: A Simple Investment Guide

Olu Olu
1 minute ago
3 min read

If there’s one piece of investment advice that has survived generations, it’s the “100 minus your age” rule. It’s simple, memorable, and surprisingly intuitive—subtract your age from 100 to find the percentage of your portfolio that should be invested in equity investments (e.g. stocks, ETFs). The rest goes into safer, fixed-income investments like bonds or GICs.

So, if you’re 30 years old, this rule suggests holding 70% equity and 30% fixed-income. At 60, that shifts to a balanced 40% equity and 60% fixed-income portfolio. The logic sounds reasonable: when you’re young, you can afford more risk because time smooths out volatility. As retirement nears, you protect what you’ve built.

But is the math still right for today’s world?

Why Investors Loved This Rule

The beauty of the 100-minus-age formula lies in its simplicity. You don’t need a finance degree to use it. That’s part of its power—it gives structure when emotions and market noise are loud.

It teaches two timeless truths:

Risk declines with age: As you near retirement, you naturally want to preserve capital.
Discipline matters: Gradually rebalancing your portfolio each year keeps greed and fear in check.

For decades, it was the default “autopilot” for many portfolios—and honestly, a better plan than no plan at all.

When Simple Becomes Oversimplified

However, financial markets and life expectancies have changed dramatically.People now live longer, interest rates are volatile, and inflation bites harder. Modern research suggests the traditional version may underinvest you in stocks later in life, exposing your wealth to inflation risk rather than market risk.

That’s why many advisors have updated the rule to “110 minus age” or even “120 minus age”. These versions assume you’ll need your portfolio to grow for a longer retirement horizon.

But more importantly, the old rule misses personal factors—your income stability, goals, time horizon, and comfort with market swings. Two people both aged 50 could have dramatically different financial lives.

The Real Takeaway: Balance, Not Blind Math

The 100-minus-age rule offers a valuable starting point—but not a finish line. It gives beginners a mental anchor, yet it doesn’t replace a detailed asset allocation plan built around your life goals, not just your birth date.

A better approach is to use the rule as a conversation starter:

Are you on track to retire earlier—or later—than average?
How secure is your income and how much liquidity do you need?
Do rising living costs worry you more than short-term volatility?

Your answers shape whether you’re actually comfortable being “70% stocks at 30” or whether a smarter mix looks entirely different.

A Smarter Next Step

Imagine your investment plan not as rigid math, but as a living strategy that evolves with you—career changes, family milestones, or shifting markets. That’s how modern wealth management works.

If you’ve ever wondered whether your current mix truly fits your story, the 100-minus-age rule is the perfect place to start that conversation. Let’s turn that simple formula into a personalized strategy that works for the next twenty years, not just the next trend.

Curious how your current asset allocation stacks up? Reach out for a personalized portfolio review—it’s often the difference between a rule of thumb and a real plan that grows with you.

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