You’ve heard it all before: The best time to start planning for retirement is now; the sooner you begin investing, the better. You hear this repeatedly because, over time, money that has been invested has the potential to grow exponentially.

What’s discussed less often is that how you invest should evolve as you age. As your income changes and your retirement goals come into clearer focus, the amount you invest and the way those investments are allocated should be reassessed.

“Asset allocation” refers to the mix of accounts or commodities in which you’re investing. Primarily, this includes stocks (equities), bonds (fixed-income securities), and cash or cash equivalents (savings accounts, money market accounts and certificates of deposit (CDs)). Other asset classes include real estate, commodities, and futures and other derivatives. Each asset carries a different level of risk (chance of losing money) and reward (chance of making money; also called returns). Investors strive to achieve just the right balance of asset types so that they make the most of their money without subjecting it to undue risk.

How Your Asset Allocation Should Evolve as You Get Older

If you’ve found an investment strategy that’s been working well for you, you might think that you’ve achieved an ideal balance of assets and that your investment portfolio is set for life. However, as we age, our tolerance for risk decreases, because we don’t have decades to recover from losses we may incur. For example, if a stock you’ve invested heavily in suddenly loses value, you’re more likely to be able to bounce back from that loss at 20 than at 60. That’s because you still have decades to benefit from stock market fluctuations and to invest in other, potentially high-performing assets.

While every investor’s strategy should be tailored to their unique goals and circumstances, the following examples illustrate how an asset allocation might look at various ages. Note that situations change over time, so it’s crucial to routinely review your strategy. Periodic meetings with a PNC Wealth Management Financial Advisor will help ensure your retirement plan stays on track, and it’s always wise to hold at least six to 12 months of living expenses in cash or liquid assets for access to immediate funds.

Investing in Your 20s

Asset Allocation Example:

Stocks – 80-90%

Bonds – 10-20%

Your 20s are a busy time financially, while your top priorities should be paying off any student loans or credit card debt you may have and building up an emergency fund, it's also a great time to start investing for retirement. You can be more aggressive with your investments at this age, meaning you can lean more heavily on higher-risk assets, such as stocks, which may deliver a higher rate of return than bonds or cash.

One of the easiest ways to begin investing is to sign up for your employer’s 401(k) plan, if they offer one. This type of retirement account allows you to put money from your paycheck toward your retirement before taxes are taken out. You choose how those funds are invested, and you can change that allocation as you go. One of the great features of a 401(k) plan is that some employers match their employees’ contributions to the plan up to a certain percentage, so you have even more money to invest. You don’t pay income tax on those funds until you withdraw them during retirement.

If your employer does not offer a 401(k) or if you are already contributing the maximum amount your employer will match, consider opening a traditional or Roth individual retirement account (IRA). These accounts also enable you to choose how your funds are invested.

Investing in Your 30s

Asset Allocation Example:

Stocks – 70-80%

Bonds – 20-30%

Your priorities are likely to shift in your 30s. Instead of focusing on paying off student loans, you may be more concerned with mortgage payments or the costs of starting a family and saving for your kids’ college education. You’re also probably further ahead in your career and making more money than you were in your 20s, so this may be an excellent time to increase the amount you are investing. With years to go before retirement, your investments can still withstand a moderate amount of risk. However, you may want to consider allocating a bit more to more conservative assets, such as bonds, to give yourself a deeper cushion.

Investing in Your 40s

Asset Allocation Example:

Stocks – 60-70%

Bonds – 30-40%

In your 40s, retirement planning should become a primary financial focus. While you may still have years before you begin withdrawals, this is an important period to strengthen your retirement plan and confirm you remain on track to meet your long-term goals.

As you move through this decade, your investment risk profile often begins to shift. You may still maintain exposure to growth-oriented investments, but decisions should be made with greater discipline and diversification. Prioritize high-quality, well-researched investments aligned with your objectives, and avoid taking unnecessary risks, as there may be less time to recover from significant market declines than in earlier decades.

Investing in Your 50s and 60s

Asset Allocation Example:

Stocks – 50-60%

Bonds – 40-50%

As retirement nears, the focus shifts to balancing growth with protecting your assets. Many retirees still keep equity exposure to help protect against inflation.

A top priority in your 50s should be drawing up a detailed retirement plan: At what age do you want to retire? Given your retirement funds, at what age will you be able to retire? Draft a budget to see how much money you will need in each month of retirement to live comfortably. If you find that you need to “catch up” on your investing, revisit your 401(k) account. The IRS allows employees over 50 to contribute additional funds to their 401(k) account in preparation for retirement.

Investing in Your 70s and 80s

Asset Allocation Example:

Stocks – 30-50%

Bonds – 50-70%

If you haven’t retired by this age, keep investing! Your investment strategy at this stage should shift mostly away from growth and instead move toward making your money last — perhaps for multiple generations. This is where you want to be as conservative as possible, because no one wants to see their hard work vanish before their eyes.

Age Group

Example Asset Allocation

Key Financial Priorities

Investment Approach & Considerations

20s

Stocks: 80–90%
Bonds: 10–20%

• Pay off debt (student loans, credit cards)
• Build emergency fund
• Start investing for retirement

• High risk tolerance; focus on growth
• Contribute to a 401(k), maximize employer match if available
• Consider Traditional or Roth IRA

30s

Stocks: 70–80%
Bonds: 20–30%

• Mortgage payments
• Family expenses
• College savings for children

• Increase investment contributions
• Maintain moderate risk
• Begin shifting slightly more conservative

40s

Stocks: 60–70%
Bonds: 30–40%

• Strengthen retirement investments
• Ensure long‑term goals stay on track

• Decreasing risk tolerance
• Prioritize reliable, proven investments
• Avoid unnecessary risk as losses are harder to recover

50s & 60s

Stocks: 50–60%
Bonds: 40–50%

• Build detailed retirement plan
• Determine retirement age
• Use 401(k) catch‑up contributions

• Focus on capital preservation
• Reduce exposure to high‑risk assets
• Prepare for steady retirement withdrawals

70s & 80s

Stocks: 30–50%
Bonds: 50–70%

• Make assets last through retirement
• Manage withdrawal strategy

• Prioritize stability and income
• Shift away from growth investments
• Keep investing if still working

Keep in mind that the percentages noted above are simply examples and not advice as to how you should invest.

Summary

Your investment strategy should evolve as your life, income, and financial goals change. While starting early is one of the most powerful ways to build wealth for retirement, how you invest matters just as much as when you begin. Asset allocation, the balance between stocks, bonds, and cash, should be adjusted over time to reflect changing risk tolerance, responsibilities, and time horizons.

In your 20s, the focus is on building good financial habits, managing debt, and taking advantage of growth‑oriented investments. As you move into your 30s and 40s, increasing contributions, balancing growth with stability, and staying on track for retirement become key priorities. In your 50s and 60s, protecting your assets and preparing for retirement income take center stage, often with a more conservative allocation. By your 70s and 80s, the emphasis shifts toward preserving wealth, generating income, and making your assets last throughout retirement.

While the sample asset allocations in this article provide general guidance, every investor’s situation is unique. Reviewing your investment strategy regularly and adjusting it as your circumstances change is essential. Working with a PNC Wealth Management Financial Advisor can help you stay aligned with your long‑term goals and make informed decisions at every stage of your life. Ultimately, investing for retirement is a lifelong journey—and the most important step is getting started and staying engaged along the way.