Millions of us agonize over our investment mix. Do we have too much money in stocks — or not enough?
The right mix depends on many factors, including our day-to-day expenses and desired retirement lifestyle. Age also plays a large role, as many investors try to reduce their exposure to riskier investments like stocks as they move closer to retirement.
Recently, Vanguard looked at various age groups to find out how much retirement savings each group invests in equities. The analysis was part of the firm’s 25th edition of its How America Saves report.
Vanguard’s report is based on data from nearly 5 million people with defined-contribution plans, such as 401(k) plans, for which Vanguard provides recordkeeping services.
Before we get to the numbers, though, let’s clarify a few terms.
Equities are more commonly known as “stocks.” The term “asset allocation” refers to how someone divides their savings among asset classes such as cash, stocks and bonds. So, “equity allocation” indicates the percentage of someone’s savings that is invested in stocks specifically.
Since everyone’s situation is different, there is no right answer for how much of your savings should be invested in stocks.
There are some common rules of thumb, such as maintaining an allocation of 60% stocks and 40% bonds (which is known as the 60/40 rule), or subtracting your age from 100 and putting the resulting number (as a percentage) in stocks.
Another factor affecting equity allocation is the rise of target-date funds. These funds include a mix of assets that is automatically rebalanced to become more conservative — which typically means having less money invested in stocks — as the fund owner’s target retirement date nears.
As Vanguard reports:
“In 2005, we noted that participants’ age-based equity allocation was hump-shaped, with younger participants adopting more conservative allocations, middle-aged participants holding the highest equity exposure, and older participants having equity exposure similar to that of younger participants. In 2025, the equity allocation of Vanguard [defined-contribution plan] participants was downward sloping by age. This is tied directly to the growing use of target-date funds and managed account advice, both of which provide for declining equity exposure with age.”
But ultimately, your circumstances will dictate the best mix for you.
Equity allocation by age
Here is the average equity allocation by participant age as of Dec. 31, 2025, according to Vanguard data:
- Under age 25: 90%
- Ages 25-29: 90%
- Ages 30-34: 90%
- Ages 35-39: 89%
- Ages 40-44: 86%
- Ages 45-49: 81%
- Ages 50-54: 75%
- Ages 55-59: 69%
- Ages 60-64: 61%
- Ages 65-69: 54%
- Age 70 and older: 46%
See how your household spending compares to others’ in “Here’s How Americans Are Really Spending Their Money. What About You?“
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