I have a favorite store where I often find linen clothing from Europe. The dresses are usually one-size-fits-all, and they’re often quite voluminous. I used to have another favorite t-shirt brand that was also one-size-fits-all. Funny thing, though—the older I got, the smaller those t-shirts seemed to become. Hmmm, how did that happen?

Ever had that experience? One-size-fits-all often feels more like one-size-fits-some.

It’s the same with many financial rules. Some can be applied broadly, while others… not so much.

One rule I’ve been asked about before is the Rule of 100. It’s a simple formula for allocating investments: subtract your age from 100, and the result is the percentage of your portfolio that should be in equities (higher-risk investments). The remaining percentage—your age—should be in fixed income (safer investments like bonds and government debt). Some people extend this to 110 or 120, as people are living longer these days. The formula works the same way—just use 110 or 120 instead of 100.

But what’s missing from this rule? Well, it doesn’t account for your personal tolerance for risk, your financial capacity to handle it, or any unique circumstances in your life and future goals.

While life expectancy has generally been increasing (except for a dip in 2020 and 2021, according to the CDC), this means your investments need to last longer. How long depends on your lifestyle and needs. How much income will you need, and for how long? Are you planning to leave a legacy, or do you want to spend every cent? What does it cost you to live now, and will those costs increase or decrease in the future?

By all means, use general rules as a guideline—but like those one-size-fits-all clothing labels, the fit might not be perfect. The best financial plan is the one tailored to you.

If you’ve been thinking about your own financial fit (and fitness), I’d love to chat. You can set up an introductory call or send me a note at https://www.heartstrongwealthplanning.com/contact/.

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