How this calculator works
Each holding's share of the total is compared with its target percentage. The largest difference is the drift; a common rule is to rebalance once any asset is more than 5 points off. The buy or sell amount brings each holding back to its target.
Worked example
With the example values below: Largest drift, 15.0% (rebalancing makes sense). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Current holdings | |
| Stocks | $70,000 |
| Bonds | $20,000 |
| Cash | $10,000 |
| Target mix | |
| Stocks | 60% |
| Bonds | 35% |
| Cash | 5% |
What asset allocation means
Asset allocation is how your portfolio is split between stocks, bonds and cash. It drives most of a portfolio's risk and return. Stocks grow most over long periods but can fall 30% or more in a bad year; bonds are steadier; cash is safest but barely keeps up with inflation.
The right mix depends on how long until you need the money, how much you need it to grow, and how you'd react to a big drop.
Common starting points
These are starting points. Someone with a pension or very stable income can take more stock risk; someone who would sell in a panic should take less.
- Age-based rules: hold roughly 110 or 120 minus your age in stocks, so a 40-year-old would hold 70% to 80% stocks.
- Target-date funds: shift gradually from stocks to bonds as a chosen retirement year approaches.
- Goal-based: money needed within five years in bonds and cash; long-term money mostly in stocks.
Why and how to rebalance
As markets move, your mix drifts. After a strong year for stocks, a 60/40 portfolio might become 68/32, carrying more risk than you chose. Rebalancing sells what has grown and buys what has lagged to restore the target.
Common approaches are rebalancing on a schedule, such as once a year, or when any asset drifts more than about 5 percentage points from target. In taxable accounts, rebalance with new contributions or inside retirement accounts first to avoid realizing gains.
Frequently asked questions
What is a good asset allocation for my age?
A common rule of thumb is 110 or 120 minus your age in stocks, with the rest in bonds and cash. At 30, that's about 80% to 90% stocks; at 60, about 50% to 60%. Adjust for your goals and comfort with risk.
How often should I rebalance my portfolio?
Once a year, or whenever an asset class drifts more than about 5 percentage points from its target. Rebalancing too often adds costs without much benefit.
What is a 60/40 portfolio?
A portfolio with 60% in stocks and 40% in bonds, a classic balanced mix for moderate risk. It has historically fallen less than an all-stock portfolio in downturns, with lower long-term returns.
Does rebalancing trigger taxes?
Selling investments at a gain in a taxable account can. Rebalancing inside 401(k)s and IRAs, or directing new contributions to underweight assets, avoids that.
Should cash be part of my asset allocation?
Yes, for money you'll need within a year or two and your emergency fund. For long-term investments, large cash holdings tend to lag inflation.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.