Asset Allocation Calculator India

About the asset allocation calculator

An asset allocation is how your investments are split between equity, which grows but swings, debt, which is steadier but barely beats inflation after tax, and gold, which often holds up when the other two fall. The split decides most of your long-term return and how rough the ride feels. Below the tool: how the split is worked out, why an all-FD portfolio is not as safe as it looks, and how to keep the split on track.

What split should I hold at my age?

On the calculator's default, a 35-year-old with moderate risk gets 65% in equity, 25% in debt and 10% in gold. On ₹10 lakh that is ₹6.5 lakh, ₹2.5 lakh and ₹1 lakh. Treat it as a starting frame, not a prescription: your job security, your loans and how you behaved in the last market fall matter as much as your age. Enter your own amount, age and risk above.

How does the calculator work it out?

It starts from an old rule of thumb, 100 minus your age in equity, so a 35-year-old starts at 65%. Conservative takes 15 points off, aggressive adds 12, and equity is kept between 10% and 90%. Gold is fixed at 10%, and debt is whatever is left. The table below shows the result across ages.

Is keeping everything in FDs safe?

Your rupees are safe. Their buying power is not. An FD at 7% is taxed at your slab every year, and once 6% inflation is taken out, most taxpayers end up behind where they started. That is the cost of a low risk appetite, and it is paid slowly, so it rarely feels like a loss.

Why hold debt and gold at all?

To cushion the falls. Equity is the part that grows, but it can drop 30% or more in a bad year. A portfolio with some debt and gold falls less, and a smaller fall is much easier to sit through without selling at the bottom, which is where most investors lose real money.

Do my EPF and PPF count as debt?

Yes. EPF, PPF, FDs, RDs and debt funds all belong in the debt part. Many salaried people already hold a large debt share through EPF without counting it, so add up everything before you decide that you need more debt. Often the right move is to put new money into equity and let EPF be most of your debt.

Where does my emergency fund go?

Outside the split. Your emergency fund is money you may need tomorrow, so it sits in a savings account, a sweep FD or a liquid fund and is not part of your investments. Build six months of expenses first with the emergency fund calculator, then allocate the rest.

How often should I rebalance?

Once a year is enough for most people, or sooner if any part drifts more than about 5 percentage points from its target. The easiest way is to send new money to the part that has fallen behind, because selling equity can mean paying tax: long-term gains on equity above ₹1.25 lakh a year are taxed at 12.5%.

Should the split be different for each goal?

Yes, and this matters more than the overall number. Money for a goal within about three years, such as a car or next year's fees, belongs mostly in debt, because equity can be down exactly when you need it. Money for goals ten or more years away can hold much more equity: from 2000 to 2025, no 10-year stretch of the Nifty 50 lost money, as the 25-year record shows. Plan each goal with the goal planner.

What is the best way to hold the gold part?

Through a gold ETF or a gold mutual fund, which track the gold price and can be bought in small amounts. Jewellery carries making charges you do not get back when you sell, so it is a poor way to hold the investment part. Gold produces no income and can go sideways for years, which is why the calculator keeps it at 10%.

What does the calculator leave out?

Your home, any other property, a business, and your insurance. It also ignores tax, fund costs and how secure your income is. A person with a steady government salary can usually carry more equity than a person whose income swings, at the same age. Use the split as the first draft and adjust it for your own life.

I am close to retirement. Should I move everything to safe options?

No. A retirement can last 25 or 30 years, and money that will be spent in year 20 still has time to grow. Keep the next few years of spending in debt and leave the rest with a sensible share of equity. The 3% rule guide explains how much you can draw each year without running out.