Compare allocation methods

Two ways to answer the same question. The bucket method sets your mix by when you'll spend the money. The age rule sets it by your age. Neither is the right answer, and seeing both at once is the point. Your portfolio is shared across both, so change it on either side.

Bucket

81% growth

19% stable

Age-based

70% growth

30% stable

Bucket Allocation

Allocation set by when you'll need the money, not by your age. Money you'll spend soon stays out of the market. Money you won't touch for years can grow.

This side shows the share of a portfolio you'd hold in stable assets (e.g., cash, a high-yield savings account, money market) versus growth assets held for the long run (most commonly a broad stock index fund), based on when each dollar is needed. It doesn't judge whether your portfolio is large enough to last. For that, start with your FI number.

Your numbers

Portfolio value

$total

The invested balance you're allocating. Shared with the age-based side, so changing it here changes it there too.

Base annual spending

$/yr

What you expect to draw from the portfolio in a typical year, in today's dollars. Adjustments for specific years come next.

Adjustments

Optional. These reshape the need in specific years inside your ten-year reserve. A cost adds to a year; an income source that starts later subtracts from it. Anything scheduled past year 10 sits in the long-term equity bucket already, so it won't change the split.

Your ten-year reserve $800,000

Stable

19%

$384,000

Growth

81%

$1,616,000

How this works: The next ten years of spending are held in reserve, split by when you'll need each year's money. The first two years stay entirely in stable assets. From year three on, each year holds ten percent in growth assets for every year until you need it, so thirty percent at three years out, rising to one hundred percent at ten years. Everything beyond your ten-year reserve is the long-term bucket, held fully in growth assets. Stable means holdings you can draw on without worrying about the market: cash, a high-yield savings account, money market, or similar cash-like assets you can pull from at par. The first two years stay in these. For the stable portion of years three through ten, high-quality bonds matched to when you'll need the money are a reasonable choice too, since that money has a little more time before it's spent. Growth means assets you hold for the long run, most commonly a broad stock index fund. The role can be filled other ways; what matters here is that this money isn't needed for years and is expected to move with the market in the meantime. Everything is in today's dollars. This is a snapshot of a target allocation, not a projection. In practice you refill the near-term buckets from the long-term one over time as markets allow. It doesn't account for taxes, account location, sequence of returns, or which specific holdings you use.

Age-Based Allocation

A common rule of thumb sets your growth share as a number minus your age, so the mix grows more conservative as you get older. It's the idea behind target-date funds, sometimes called a glide path.

This side shows the share of a portfolio you'd hold in stable assets (e.g., cash, a high-yield savings account, short-term bonds) versus growth assets held for the long run (most commonly a broad stock index fund), based on a common age rule. It doesn't judge whether your portfolio is large enough to last. For that, start with your FI number.

Your numbers

Portfolio value

$total

The invested balance you're allocating. Shared with the bucket side, so changing it here changes it there too.

Your age today 40

Which rule

All three are in common use. A higher number holds more in growth assets at every age, which is more aggressive. The spread between them is the point: the rule is a choice, not a fixed law.

Growth floor

Optional. A minimum growth share the mix won't drop below, no matter your age. Some people set one so the portfolio keeps some growth in later years. Leave it blank for no floor.

Stable

30%

$600,000

Growth

70%

$1,400,000

How this works: Your equity share is the rule's number minus your age, so 110 minus age 40 is 70 percent in growth assets and the rest stable. The share is held to a range of 0 to 100 percent, and an optional floor keeps it from falling below a level you choose. Stable here is the non-growth side of the mix: cash and cash-like holdings such as a high-yield savings account or money market, along with higher-quality bonds. The cash-like part you can pull from at par; bonds carry less risk than stocks, though their value can still move. Growth means assets you hold for the long run, most commonly a broad stock index fund. This method sets the mix by age alone. It doesn't look at when you'll actually spend the money, which is what the bucket approach does instead. Neither is the correct answer; they answer the question in different ways. This is a snapshot of one common rule, not a projection or a recommendation, and it doesn't account for taxes, account location, other income, or which specific holdings you use.