Saving for retirement sounds easy enough, if you can afford to do it. But you need a place to actually put the money to make it work for you. Carmen and Bill Losey, On the Money’s resident planning expert, revealed their different takes on asset allocation – how you divide money up between stocks, bonds and cash – for every age group, starting with those industrious twenty-somethings already socking away.

In Your 20’s

It’s a myth that young people have to invest aggressively and older people have to invest defensively, Losey said. This is a personal decision and it varies for everyone. He recommended people in their 20’s put up to80% of their savings in stocks and 20% in bonds.

Carmen took it a step further. When you’re younger is the time to take risks, she said. She would allocate 90% to stocks, where the money can really grow, and keep 10% either liquid or in bonds.

In Your 40’s

Losey advises keeping 60-70% in stocks and the rest in fixed-income for people at the midway point of their careers. On the downside, you’re looking at a 15% loss in any given year with that kind of allocation, he said. He’d advise something more aggressive for people who have pensions in addition to social security.

Again, Carmen took a less aggressive approach, recommending a 75/25 split between stocks and bonds.

In Your 50’s

The general rule for baby boomers, Losey said, is to keep retirement savings split even at this age: 50% for stocks, 50% for bonds. You can expect a return of 6-10%, net of all fees.

Carmen took another slightly more aggressive approach, recommending a split of 60/40 between stocks and bonds for those with another 10-12 years of work left in them.

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