On the other hand, a 50-year-old might consider investing 70% in stocks and 30% in bonds.
The 120 Rule is an investment tool designed to help an individual dynamically maintain a risk-conscious asset allocation throughout life. It works by subtracting your age from 120. The resulting number is the percentage of money you should place in stocks, with the balance placed in bonds. For example, a 30-year-old would invest 90% in stocks and 10% in bonds. On the other hand, a 50-year-old might consider investing 70% in stocks and 30% in bonds.