← Back to Topic 7
Topic 7 · Taxes & Investing · Lesson 7.6

Portfolio Glide Path

How target-date funds automatically reallocate your money as you age. Pick your current age, retirement age, and an allocation rule of thumb; watch the stock and bond percentages slide across decades. The expected-return readout shows the cost of the conservative shift — a slightly lower long-run return in exchange for a much smoother ride near retirement.

Stock / bond allocation across a working life
stocks % ≈ 110 − age · bonds % = 100 − stocks %
At age 25, the 110 − age rule allocates 85% to stocks and 15% to bonds, for an expected long-run return of about 6.4% per year.

Stocks today

85%

expected 7%/year long run

Bonds today

15%

expected 3%/year long run

Expected return

6.40%

weighted average · before inflation

Years to retirement

40

at the chosen retirement age

% Stocks % Bonds Your current age

Your age now 25

1880

Retirement age 65

5080

Stock expected return 7%

3%12%
Allocation rule