Why allocation changes at all
The mix between growth assets (shares, property) and defensive assets (bonds, cash) is the single biggest driver of both your returns and how violently your balance swings. Shares have historically produced the strongest long-term growth and the most brutal short-term drops. Bonds and cash do the opposite.
The logic of shifting over time is simple: a market crash is an inconvenience when you have thirty years and a catastrophe when you have three. Time is what lets you ride out a bad decade. As it runs out, so does your capacity to absorb one.
The rule of thumb, and its limits
The classic rule says shares should be 100 minus your age as a percentage - so 70% shares at 30, 40% at 60. Many now use 110 or 120 minus your age, because people live longer and stay invested well past retirement.
Use it as a sanity check, not a plan. It ignores what the money is for, what else you own, whether you have a pension, and whether you can actually stomach a 30% drop without selling.
Your 20s: time is the entire advantage
Typical shape: heavily weighted to shares - commonly 90-100% growth assets.
You have the one thing money cannot buy, which is decades of compounding. A crash in your 20s is genuinely good news if you keep contributing, because you spend years buying at lower prices. See how compounding works for why the early years carry so much weight.
The mistake here is almost never being too aggressive. It is:
- Holding too much cash because markets feel risky. Over thirty years, cash is the risky choice - inflation quietly guarantees you lose purchasing power.
- Not starting while waiting to have "enough" to invest. You can begin with very little; see how much you actually need to start.
- Skipping the emergency fund. Without three to six months of expenses in accessible cash, the first emergency forces you to sell investments at whatever price the market happens to offer.
Practical priorities: emergency fund, expensive debt cleared, then a broad global index fund inside a tax-free savings account, funded by a monthly debit order you never have to think about.
Your 30s: competing goals arrive
Typical shape: still growth-heavy - often around 80-90% shares - but now split across different time horizons.
This is the decade where a single portfolio stops making sense, because your money starts having different jobs. Retirement is thirty years away. A house deposit might be three years away. Those two pots should not be invested the same way.
| Goal | Time horizon | Typical approach |
|---|---|---|
| Emergency fund | Immediate | Accessible cash - not invested |
| House deposit | 1-3 years | Cash or short-term income assets |
| Children's education | 5-15 years | Balanced, shifting more defensive as the date nears |
| Retirement | 25-35 years | Predominantly shares, globally diversified |
Splitting by goal rather than running one blended portfolio makes decisions far easier, because each pot has an obvious answer.
This is also when retirement contributions get serious. Contributions to a retirement annuity or pension fund are tax-deductible up to the annual limits, which is effectively a return before the market does anything. The trade-off is Regulation 28, which caps how much of that money can sit in shares, property and offshore assets - so retirement fund money is structurally more conservative than you might choose. Balancing it with a TFSA and discretionary investments, which have no such caps, gives you back control of your overall mix.
Your 40s: peak earning, peak distraction
Typical shape: commonly 70-80% shares.
You are probably earning more than ever and, very often, saving a smaller share of it than you did at 30. Lifestyle expands to fill income. The single highest-impact move in this decade is not a clever allocation - it is raising your contribution rate every time you get a raise.
Two allocation habits matter now:
- Check your actual offshore exposure. Many South Africans discover their retirement fund, their property and their salary are all tied to one economy. Diversifying globally is not exotic at this point - it is basic risk management. Our guide to JSE vs international stocks covers the balance.
- Consolidate. Old employer funds and forgotten accounts scattered across providers make it impossible to know what you actually own. You cannot manage an allocation you cannot see.
Your 50s: the sequence risk decade
Typical shape: often 55-70% shares, drifting down through the decade.
Now a specific risk appears that did not exist before: sequence risk. A 40% market drop at 32 is an opportunity. The same drop at 62, with withdrawals about to begin, permanently damages the pot because you are selling assets at depressed prices instead of buying them.
This is why the glide toward defensive assets happens here rather than earlier. But it should be a glide, not a lurch. Moving everything to cash at 55 introduces a different risk - that inflation erodes a portfolio that still needs to last thirty-plus years.
Started late? The maths is still on your side
Starting at 50 means fewer years of compounding, not none - and it is usually paired with a much higher earning capacity than a 25-year-old has. Twenty years of serious contributions builds something real. We cover this properly in is it too late to start investing?
Retirement: not a finish line
Typical shape: often 40-60% shares, structured by when the money is needed.
The most persistent misconception is that retirement means switching to cash and bonds. If you retire at 65, part of that money may not be spent until you are 90. Money with a twenty-five-year horizon should still be invested for growth, even though you have technically retired.
A common structure separates the portfolio by when you will spend it: two to three years of income needs held in cash and short-term instruments so no market crash forces you to sell at the bottom, a middle layer in income-generating assets, and a long-term layer still in growth assets for the later years.
The questions that matter more than your age
Two people the same age can justifiably hold completely different portfolios. What actually determines the right mix:
- When do you need this specific money? The single most important input, and the one age only approximates.
- How secure is your income? A stable salary is itself a bond-like asset, which can support more shares elsewhere. Variable or commission income argues for a bigger cash buffer.
- What else do you own? A paid-off property and a defined-benefit pension change the picture entirely.
- What did you do in the last crash? The most honest risk-tolerance test there is. If you sold, your real tolerance is lower than your questionnaire says - and a slightly conservative portfolio you hold through a crash beats an aggressive one you abandon.
The best allocation is not the one that maximises returns on a spreadsheet. It is the one you will still be holding on the worst day of the next crash.
Making the shift happen
Allocation drifts on its own. If shares run hard for a few years, a 70/30 portfolio quietly becomes 85/15 - meaning your risk rose while you did nothing. Reviewing once or twice a year and adjusting back keeps your actual portfolio aligned with your intended one; see how to rebalance without paying high fees.
The gentlest way to shift over time is with new money. Instead of selling shares to buy bonds - which triggers costs and potentially tax - direct new contributions toward whatever is underweight. Over a few years this moves your allocation without selling anything.
Know what you actually hold
Most people are surprised by their real allocation once they see everything in one place. EZvest's portfolio view shows your mix across assets and regions, the Learning Hub covers allocation and risk in short lessons, and FinBot explains anything you are unsure about - as an educational tool, with your decisions staying yours.
Frequently asked questions
What is the 100-minus-your-age rule?
A rule of thumb that says the percentage of your portfolio in shares should be 100 minus your age - so a 30-year-old holds 70% shares. Many now use 110 or 120 minus your age, because people live and stay invested longer than when the original rule was coined. It is a starting point for thinking, not a plan.
Should a 30-year-old hold any bonds at all?
For money genuinely not needed for thirty years, a strong argument exists for holding very little in bonds, since shares have historically outgrown them over long periods. But bonds also make a portfolio less alarming during a crash, and an allocation you can actually stick with beats a theoretically optimal one you abandon at the bottom.
What is Regulation 28 and does it apply to me?
Regulation 28 of the Pension Funds Act limits how retirement fund money in South Africa can be allocated - capping exposure to shares, property and offshore assets. It applies to retirement annuities, pension and provident funds, but not to discretionary investments or a tax-free savings account, which is one reason to use both types of account.
Does my portfolio need to become conservative the day I retire?
No, and treating retirement as a hard switch is a common error. If you retire at 65 you may need that money to last thirty years, so a portion of it still has a long time horizon. Many retirees keep meaningful growth exposure for the later years while holding a few years of income needs in safer assets.
Is age or time horizon more important for asset allocation?
Time horizon, clearly. A 25-year-old saving for a house deposit in two years should be far more conservative than a 55-year-old investing money they will not touch for twenty. Age is a rough shortcut for horizon, and when the two conflict, horizon wins.
See your actual allocation
Track what you hold, see your real mix across assets and regions, and ask FinBot to explain anything you are unsure about.
Launch EZvest - it's free to start ->Educational content only. This article is general information, not financial advice. The allocations described are illustrative conventions, not recommendations, and the right mix depends on your circumstances, goals and risk tolerance. Investment values fluctuate and can fall. Consult a licensed financial professional before making decisions. How we research and review these guides.