What Percentage of Bonds Should I Have?
The old '100 minus your age' rule for bonds is a decent starting line, not a finish line. Your real number depends on your timeline, your stomach for losses, and your goals.
Don't have time? Here's what you need to know:
- 1A common starting point is 110 or 120 minus your age in stocks, with the remainder in bonds, then personalize from there.
- 2Bonds exist to cushion crashes and keep you invested, not to maximize returns; how many you hold reflects how much stability you want.
- 3Time horizon, risk tolerance, and income stability move your number up or down from the age-based default.
- 4A glide path that raises bonds toward retirement guards against a crash hitting just as you start withdrawing.
The Quick Answer, Then the Nuance
There is no single correct bond percentage, but there is a useful starting point: a common rule of thumb is to subtract your age from 110 or 120 to get your stock percentage, and put the rest in bonds. A 30-year-old using '120 minus age' would hold about 90% stocks and 10% bonds; a 60-year-old would hold about 60% stocks and 40% bonds. The number then gets adjusted up or down based on your timeline, your risk tolerance, and what the money is for.
Bonds are not in the portfolio to make you rich, stocks do that. Bonds are there to cushion the falls. When stocks drop 30% or more in a crash, high-quality bonds often hold their value or rise, which steadies the portfolio and, just as importantly, makes it easier to stay invested instead of panic-selling at the bottom. Your bond percentage is really a measure of how much stability you are willing to buy with some long-run growth.
Age-Based Rules of Thumb
The classic version was '100 minus your age' in bonds. Because people now live and invest longer, many advisors shifted to 110 or 120 minus your age, which keeps more in stocks for longer. These rules are popular because they are simple and they automatically get more conservative as you age, which is the right general direction.
Treat them as a default, not a law. They ignore everything specific to you, your other income, your job stability, whether you will inherit money, and how you actually behaved the last time markets fell. They are a sensible anchor that you then personalize.
| Age | 100 minus age (bonds) | 110 minus age (bonds) | 120 minus age (bonds) |
|---|---|---|---|
| 25 | 25% | 15% | 5% |
| 35 | 35% | 25% | 15% |
| 45 | 45% | 35% | 25% |
| 55 | 55% | 45% | 35% |
| 65 | 65% | 55% | 45% |
Tip: Younger investors with decades until retirement can usually justify the more aggressive end (110 or 120 minus age), because they have time to recover from downturns and many more paychecks to invest.
Three Things That Shift Your Number
Once you have an age-based starting point, three personal factors move it. The first is time horizon: money you need within a few years should lean heavily toward bonds and cash, while money you will not touch for 20 or 30 years can hold more stock. The second is risk tolerance, your genuine ability to watch the portfolio fall without selling. If a 30% paper loss would make you abandon the plan, holding more bonds that shrink that drop is worth giving up some expected return.
- Time horizon: shorter goals need more bonds; a 30-year horizon can tolerate a stock-heavy mix.
- Risk tolerance: if big drops would make you sell, more bonds keep you in the game, which is worth more than the lost upside.
- Capacity for risk: stable income, a pension, or a large emergency fund lets you hold more stock; reliance on the portfolio for near-term spending argues for more bonds.
Important: Your risk tolerance is what you do in a real crash, not what you imagine you would do in a calm market. Be honest, the most expensive mistake is selling stocks at the bottom because you held too few bonds to sleep at night.
The Glide Path: Increasing Bonds Over Time
A glide path is a plan to raise your bond percentage gradually as you approach and enter retirement, rather than flipping a switch on your retirement date. This is exactly what target-date retirement funds do automatically: they might hold roughly 90% stocks decades out, then steadily add bonds so that around retirement they sit closer to 50-60% stocks, and keep adjusting in retirement.
The logic is sequence-of-returns risk. A severe market drop in the years right around retirement, when you start withdrawing, does far more lasting damage than the same drop at 30, because you are selling shares into a falling market instead of buying. Holding more bonds in that window cushions the blow. If you prefer to manage it yourself, a broad bond ETF like BND or AGG is a simple core holding to grow over time, and rebalancing keeps your chosen mix on track.
Putting a Number on It
Here is a practical way to land on a figure. Start with an age-based rule (110 or 120 minus age for the growth-minded, 100 minus age if you are more cautious). Nudge it toward more bonds if your horizon is short, your income is unstable, or you know you panic in downturns, and toward fewer bonds if you have decades to invest, secure income, and a steady temperament.
What matters far more than getting the percentage exactly right is picking a reasonable mix and sticking with it through good markets and bad. A 70/30 investor who rebalances and stays the course will almost always beat someone who jumps between 100% stocks in bull markets and 100% cash after every crash. Choose an allocation you can actually live with, then leave it alone.
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Frequently Asked Questions
What is the 'minus your age' rule for bonds?
It is a rule of thumb that sets your bond percentage by subtracting your age from a base number. The original was '100 minus your age', so a 40-year-old holds 40% bonds. Because people invest for longer now, many use 110 or 120 minus age instead, which keeps more in stocks, a 40-year-old would then hold 30% or 20% bonds. It is a starting point you then adjust for your own situation.
Should a young investor hold any bonds at all?
It is reasonable to hold few or none if you have a long horizon, stable income, and the temperament to ride out crashes without selling. Some young investors keep a small 10-20% bond slice mainly to dampen volatility and practice rebalancing. The bigger risk for someone young is not too few bonds, it is bailing out of stocks during a downturn, so hold enough bonds that you can stay invested.
Do bonds protect a portfolio in a market crash?
High-quality bonds, like Treasuries and broad investment-grade bond funds, have historically held up or risen when stocks fell sharply, which softens the overall drop. That cushion is the main reason to own them. The 2022 sell-off was an unusual exception when both stocks and bonds fell together as interest rates spiked, but over most crashes high-quality bonds have provided real ballast.
How often should I adjust my bond percentage?
You do not need to tweak it constantly. Set a target mix, rebalance back to it roughly once a year or when it drifts more than about five percentage points, and gradually raise your bond percentage as you age along a glide path. Avoid changing the target in reaction to headlines, the whole point of choosing an allocation is to give yourself a plan to stick to.
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Alex Harrington
CFA Level II Candidate, Finance & Economics
Alex Harrington is an independent ETF researcher and personal finance writer with over 8 years of experience analyzing exchange-traded funds. A CFA Level II candidate with a background in economics, Alex has reviewed 800+ ETFs and helped thousands of beginners build their first investment portfolios through clear, jargon-free education.
This content is for educational purposes only and does not constitute financial advice. Past performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.