How much equity should you hold at your age? The rule of thumb, and what to use instead

The rule of thumb, and what it gets right

"Hold 100 minus your age in equity, the rest in debt." Some versions use 110 or 120 to allow for longer lives. At 30 the rule gives 70% equity; at 45, 55%; at 60, 40%.

What it gets right: a younger investor has more years to recover from a fall and more working years to add money. The guide on how long to stay invested shows why: on the Nifty 50 since 2012, a one year holding lost money in about one start date in six, a seven year holding never did.

What it misses: everything else about you. Two 30 year olds can need opposite answers. One is saving for a house deposit in two years; the other for retirement in thirty. One has a government job; the other runs a business with lumpy income. Age is a rough proxy for horizon, and a poor proxy for the rest.

Four inputs that matter more than age

• When each rupee is needed. Split your money by goal. A house deposit in two years and retirement in twenty-five should not share one equity percentage. Money needed within about three years usually sits outside equity, whatever your age.
• How steady your income is. A salaried person with a stable job can carry more equity than someone whose income falls in the same recession that hits the market. The note who sells first puts a household's real risk in those terms.
• What you already hold. EPF, PPF, fixed deposits and bonds are debt. A 35 year old with ₹15 lakh in EPF and ₹5 lakh in equity funds is at 25% equity, not the 100% their mutual fund statement suggests.
• The fall you can hold through. Not the one you think you can tolerate; the one you have actually held through, or would, without selling. This is the input that decides whether any mix works.

What different mixes did, 2015 to 2026

To show the trade off on Indian data, I combined the Nifty 50 with NSE's 10 year benchmark G-Sec index, a government bond index that includes interest, rebalanced to the target mix at the start of each year, from 31 Dec 2015 to 12 Oct 2026.

Each step of 20 points from equity to debt took about eight points off the deepest fall and about 0.75 points off the yearly return. The reason is visible in the bond index: in the 2020 crash, from 14 Jan to 23 Mar 2020, the Nifty 50 fell 38.44% while the G-Sec index rose 3.27%. In the fall from Sep 2024 to Mar 2025 it rose 2.50% while the Nifty fell 15.77%. In 2026 to 12 Oct, it was roughly flat, down 0.26%, while the Nifty fell 15.06%; debt cushions a fall, it does not always rise in one.

Turn the percentage into rupees

A fall in percent is easy to accept on paper. The same fall in rupees, on the day it happens, is what makes people sell.

If the number in the output would make you sell, the equity share is too high for you, whatever your age. Lower it now, when nothing is falling, rather than at the bottom.

How the mix changes with time

For each long term goal, a common approach is a glide path: a higher equity share while the goal is far away, moved gradually into debt over the last five or so years. That protects the money from a crash in the year it is needed, the worst case the rolling returns showed. The child education guide works one through, and the retirement calculator shows how the target changes with the return you assume.

In retirement itself the question flips: the money has to last for decades, so some equity usually stays, while two or three years of spending sit in debt so a crash never forces a sale. The note same returns, different retirement shows why the order of returns matters most then.

Common mistakes with equity by age

• Counting only the mutual fund statement. EPF, PPF and deposits are often the largest debt holding a salaried family has. Leave them out and the equity share looks lower than it is, so people add more equity than they meant to.
• Raising equity after a good year. The share that felt right in 2023, after a 20% year for the Nifty 50, is the share that hurt in 2026. Set it in a calm month and change it rarely.
• One percentage for every goal. A house deposit and retirement savings with the same mix means either the deposit carries too much risk or the retirement money too little.
• Treating zero equity as safe. Debt alone can lose to inflation over twenty years. The 40% equity mix above returned 7.79% a year with a worst fall of 14.31%; at some point, too little equity is its own risk for long term money.
• Changing the mix in the middle of a fall. Lowering equity after a 30% drop locks in the loss. If the fall showed the share was too high, lower it after the recovery.

Setting your equity share, step by step

1. List the goals and their datesevery sum you will need, and when.
2. Take out the short term moneyanything needed within about three years, and an emergency fund, goes to deposits or short duration debt.
3. Count what you already holdEPF, PPF, deposits and bonds are debt; add them before choosing a fund.
4. Start from the rule of thumb100 minus your age for the long term money, as a first guess only.
5. Test it in rupeesapply a 38% equity fall to the long term pot and ask whether you would hold.
6. Adjust and write it downlower the share until the answer is yes; record the target and a yearly rebalance date.

How this shows up in RupeeCase

RupeeCase's 28 question risk profile scores what you can afford to lose (age, horizon, emergency fund, loans, work, dependents) and what you can stand to watch (how you would react to a 20% drop), and places you in one of five bands using the lower of the two scores. Several rules carry their own debt and gold sleeve, so the mix is set inside the strategy. Dynamic Asset Allocator keeps a fixed 35% equity core and lets two rules switch the rest between equity, debt and gold, rebalanced every 3 weeks: model CAGR 45.18%, deepest fall −10.57%, as of 27 Apr 2026. The asset allocation calculator shows a mix for your own numbers, and the multi asset guide covers the role of gold.

Questions investors ask