Asset Allocation Calculator: Find Your Ideal Investment Mix
Build a Diversified Investment Portfolio
How much of your portfolio should you invest in stocks, bonds, and cash? Finding the right investment mix is important for balancing risk and potential returns, especially as you approach retirement.
Use our free Asset Allocation Calculator to estimate an appropriate investment mix based on your age, risk tolerance, savings, and other financial factors.
How Does Asset Allocation Affect Your Retirement?
Your investment mix can have a significant impact on how much your savings grow and how well your portfolio holds up during market downturns.
With WealthTrace Retirement Planning Software, you can test different asset allocations and see how they affect your projected retirement income, investment balances, and probability of retirement success.
Start a free trial to see how your investment strategy fits into your complete retirement plan.
Find Your Investment Mix
Explore an illustrative mix of stocks, bonds, and cash based on your age, investments, income needs, and comfort with market fluctuations.
Suggested Asset Allocation
Adjust your information below to see an allocation.
Illustrative educational estimates only. This calculator uses a simplified asset allocation model and does not evaluate individual securities, market forecasts, tax lots, or your complete financial circumstances.
Asset Allocation Calculator Definitions
Current Age
Your age today. Age is an important factor in asset allocation because it helps determine how much time you have before you'll need to withdraw money from your investments.
Younger investors generally have more time to recover from market downturns, while those approaching or already in retirement may prefer a more conservative mix of stocks, bonds, and cash.
However, your investment time horizon, retirement income needs, and risk tolerance are just as important as your age.
Current Assets
The total current value of your investment portfolio, including stocks, bonds, mutual funds, ETFs, and cash investments.
Your portfolio size is one factor the calculator uses to estimate an appropriate asset allocation. A larger portfolio may provide greater financial flexibility, but it doesn't necessarily mean you should take more investment risk.
Annual Savings
The amount you expect to add to your investment portfolio each year.
Consistent savings can help your investments grow and may provide greater flexibility when determining your asset allocation. The calculator considers your annual contributions when estimating your suggested investment mix.
Income Required From Investments
The percentage of your income needs that you expect your investment portfolio to provide.
For example, if your annual income needs are $100,000 and you expect to withdraw $40,000 from investments, enter 40%.
Investors who depend heavily on their portfolios for income may need a different asset allocation than those whose expenses are largely covered by Social Security, pensions, or other income sources.
Marginal Tax Rate
Your estimated marginal income tax rate.
Taxes can affect the after-tax returns of different investments. For example, interest from taxable bonds is generally subject to ordinary income taxes, while qualified dividends and long-term capital gains may receive more favorable tax treatment.
This calculator uses your tax rate as one factor in estimating an investment allocation. It does not perform a complete income tax calculation.
Risk Tolerance
On a scale of 1 to 10, indicate how comfortable you are with fluctuations in your investment portfolio.
1–3: Conservative — You prioritize stability and are uncomfortable with significant investment losses.
4–6: Moderate — You can tolerate some market fluctuations in exchange for potential long-term growth.
7–10: Aggressive — You are comfortable with substantial market volatility and potential losses in pursuit of higher long-term returns.
Consider how you would react if your portfolio declined 20% or more during a market downturn. Your asset allocation should reflect both your willingness and your financial ability to accept investment risk.
Economic Outlook
On a scale of 1 to 10, indicate your expectations for future economic growth and financial market conditions.
A lower score represents a more cautious outlook, while a higher score indicates greater optimism.
The calculator considers your economic outlook when estimating your asset allocation. However, short-term economic forecasts are uncertain, so your long-term investment strategy should not depend too heavily on predicting market movements.
Important Calculator Assumptions
This calculator provides an illustrative allocation among stocks, bonds, and cash based on the information you enter.
The suggested percentages are not a personalized investment recommendation. Your ideal allocation also depends on factors such as retirement goals, investment time horizon, other income sources, liquidity needs, and your ability to withstand market losses.
Choose an allocation that fits
Test different mixes of stocks, bonds, and other investments in WealthTrace.
