Rule of 100

How Much Income Do You Need in Retirement?

Determining your overall income plan for retirement requires you to determine your sources of income or potential income. There are assets that will provide you with regular income for the rest of your life. To start looking at income plan, you should consider using the Rule of 100.

The Rule of 100 is a tool used by financial professionals to provide you with general guidelines for proper allocation of your retirement and investment assets. The Rule of 100 takes into consideration your age and investment time horizon to better define your risk tolerance. The results of this analysis can be used to determine how much of your retirement and investment assets should be exposed to risk and loss.

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The Rule of 100 uses your age as a baseline in the calculation to appropriately allocate assets. The calculation begins with the number 100. Subtracting your age from 100 provides an immediate snapshot of what percentage of your retirement assets should be in the market (at risk) and what percentage of your retirement assets should be in safe money (no-risk) alternatives. Adjustments are then applied through a detailed risk analysis to ensure your recommendation is based on your unique tolerance to risk. This strategy will reduce your exposure to undesirable market risk and the volatile market swings that most people experienced in 2008 resulting in significant loss.


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