The 60/40 Portfolio vs. 70/30 in Retirement: What the Record Shows

A 70/30 portfolio holds 70% stocks and 30% bonds, and since 1928 it has grown about half a percentage point a year faster than a 60/40 portfolio while falling further in most bad years. Whether that trade is good for retirement depends on how much you're withdrawing and how you'd handle a deep drop, so there's no answer that fits everyone.

What 60/40 and 70/30 mean

They're shorthand for an investment mix, also called an asset allocation. Stocks are the growth part. Bonds pay interest and have, in most years, moved less.

The 60/40 portfolio is the one you'll see quoted everywhere as the "balanced" default. A 70/30 leans a little further toward growth. The gap between them is ten percentage points of your money sitting in stocks instead of bonds, which sounds small and adds up over decades.

Holding either one means rebalancing. After a strong year for stocks, a 70/30 can drift to 75/25, and you sell some stocks to get back. Many 401(k) plans offer automatic rebalancing.

What the historical record shows

We ran the numbers using the annual return table kept by Professor Aswath Damodaran at NYU Stern, Historical Returns on Stocks, Bonds and Bills, which covers 1928 through 2025. Stocks are the S&P 500 with dividends. Bonds are 10-year U.S. Treasury bonds. Each mix is reset to its target once a year.

These are our calculations from that table. They're before inflation, fund costs and taxes, and an index can't be bought without some cost. Past returns don't tell you what the next 30 years will bring.

Three things stand out

The growth gap is modest. Moving from 60/40 to 70/30 added about half a percentage point of compound growth a year over the full 98 years.

The drop gap is real. In 2008, 70/30 lost 19.6% and 60/40 lost 13.9%. On $500,000 that's a $98,000 loss against a $69,500 loss in one year. Over the two calendar years 1973 and 1974, 70/30 fell about 25% and 60/40 about 21%. From 1929 through 1932, the losses were about 47% and 40%.

Bonds don't always cushion. Look at the 2022 column. Stocks and 10-year Treasuries fell by almost the same amount, so every mix lost about 18%. Bonds softened the fall in 2008 and did nothing in 2022.

Sequence-of-returns risk

While you're saving, a bad year early on barely matters. Once you're withdrawing, it matters a lot, because you're selling shares at low prices to pay the bills and those shares miss the rebound.

A made-up example. You retire with $500,000 and take $25,000 at the start of each year. Over ten years your returns are -20%, -10%, +5%, +8%, +10%, +12%, +15%, +8%, +10% and +12%. Bad years first.

You'd finish year ten with about $358,000.

Reverse the order so the two bad years come last, and you'd finish with about $512,000. Same ten returns. Same withdrawals. A difference of about $153,000 from timing alone. Without withdrawals, both orders end at the same place.

This is the heart of the 60/40 versus 70/30 question in retirement. More stocks has meant a higher return over long periods and a bigger hit when the bad years land right after the last paycheck. Our guide to sequence of returns risk goes deeper.

How target-date funds compare at 65

Target-date funds are the default in many 401(k) plans. Each follows a "glide path" that cuts stocks as you age. They're a useful reference because large fund companies publish their paths.

• Vanguard Target Retirement. Vanguard's glide path page, as of October 2026, shows 50% in stocks at age 65, falling to 30% stocks and 70% bonds at age 72.
• T. Rowe Price. The firm's target date page, as of October 2026, puts its Retirement glide path at 55% stocks at retirement (assumed to be age 65) and its Target glide path at 42.5%, with both reaching 30% thirty years later.

So these two large providers sit between 42.5% and 55% in stocks at retirement age. That's below 60/40 and well below 70/30. Glide paths change, so check your own fund's current fact sheet.

This doesn't make 60/40 or 70/30 wrong. Target-date funds are built for the average investor in a plan, and Vanguard says as much on its page. William Bengen's 1994 research behind the 4% rule recommended holding 50% to 75% in stocks. Careful people land in different places.

The questions that decide whether a mix fits you

We won't tell you which mix to hold. These are the questions a good planner would ask.

• How much of your spending is covered without the portfolio? If Social Security and a pension pay the essentials, a drop in your investments changes your vacations. If the portfolio pays the electric bill, it changes your life. Our guide to how much you need to retire starts with that spending number.
• What's your withdrawal rate? Someone taking 2% a year can ride out swings that would sink someone taking 6%.
• How long does the money need to last? A 62-year-old may be planning for 30 years or more, and inflation over that stretch is its own risk. Too little growth can hurt as much as too much risk.
• What did you do in 2008, 2020 or 2022? If you sold near the bottom, that's information. A mix you'll hold through a crash beats a better one you'll abandon.
• What's on the bond side? "30% bonds" could be short-term Treasuries or long-term corporate bonds, and they behave differently when rates rise.
• Do you have a cash cushion? A year or two of spending held outside the portfolio lets you avoid selling stocks in a bad year. Our checklist for the five years before retirement covers building one.
• Is there a spouse who'd manage this alone someday? The mix has to work for them too.

Try the stress test in dollars. Multiply your balance by 0.20 for a 2008-style year at 70/30, or by 0.14 at 60/40. Could you watch that amount disappear from a statement and still keep to the plan?

Our retirement calculator lets you see how different return assumptions change your plan, and best investments for retirees covers what the stock and bond sides can be made of. For the wider picture, start with retirement investing.

Common questions

Is a 60/40 portfolio still good for retirement?

It remains the most quoted balanced mix. From 1928 to 2025 it compounded at about 8.3% a year before costs and inflation, using Damodaran's NYU Stern data, with a worst calendar year of -27.3%. History can't promise the same ahead, and whether it suits you depends on your income sources and withdrawal rate.

Is 70/30 too aggressive for a 65-year-old?

It holds more in stocks than Vanguard's and T. Rowe Price's published target-date paths do at 65. Some retirees with pensions or low withdrawal rates hold that much or more. It's a personal call that turns on the questions above.

What's the difference in return between 60/40 and 70/30?

About half a percentage point a year in compound growth over 1928 to 2025 (8.8% versus 8.3%), by our calculation from NYU Stern data. In 1931 and 2008, 70/30 lost four to six percentage points more.

Did bonds protect a 60/40 portfolio in 2022?

No. The S&P 500 lost about 18.0% and 10-year Treasury bonds lost about 17.8% that year, so a 60/40 mix fell about 18%.

How often should I rebalance?

Our table assumes once a year. Some people rebalance when the mix drifts by a set amount, such as five percentage points. In a taxable account, selling can trigger capital gains tax; inside a 401(k) or IRA it doesn't.

Does a target-date fund do this for me?

Yes. It sets the mix, rebalances, and shifts toward bonds over time. Check the fund's fact sheet for its current stock percentage, since funds with the same year in the name can differ a lot.

We base our guides on primary sources such as the IRS, the Department of Labor, and federal regulators. Read our editorial policy. Spot an error? Tell us.