Investing 101 Pt. 2: Allocation for the Real World
- Heather Asteriou
- Sep 30
- 2 min read
If your eyes glaze over the moment someone mentions “asset allocation,” you’re not alone. It’s one of those financial terms that sounds abstract but has very real consequences for your retirement. Fortunately, it’s simpler than it sounds, and once you get the hang of it, you’ll see why it’s one of the most important things to get right in your Fidelity or TIAA plan.
What Is Asset Allocation, Really?
At its core, asset allocation answers a simple question: how much risk are you comfortable taking in exchange for the chance at more reward? In your retirement plan, your money is likely invested in a mix of:
Stocks (Equities): Higher risk, higher potential return. Best for long-term growth.
Bonds (Fixed Income): Lower risk, more stability. Provides income and balance.
Cash or Stable Value Funds: Very low risk, minimal growth. Good for short-term needs.
Annuities (TIAA): Provide guaranteed returns or income but often come with restrictions.
The percentage of your portfolio in each of these categories determines how much your account may grow or drop when markets move.
Why It Matters for Retirement
The way you allocate your investments can either help you grow your savings confidently or set you up for surprises when markets get rocky. Here’s how it tends to break down across life stages:
Early career (20s–30s): More stocks, less bonds. You’ve got time to ride the ups and downs.
Mid-career (40s–50s): More balanced. Some stock growth with more bond stability.
Pre-retirement (55+): More conservative. Preserving what you’ve built becomes the priority.
How to Check Your Own Allocation
Most retirement plan websites show your asset allocation right on your dashboard. If not, you can usually see it by looking at each fund’s breakdown. Ask yourself:
Am I mostly in stocks, bonds, or a blend?
Does that mix match how I feel about risk and how long I have until retirement?
Have I reviewed or adjusted my allocation in the past year?
What If You’re Not Sure?
That’s completely okay. You can:
Use target-date funds, which adjust automatically over time
Download our free Investing 101 guide to learn more about investment types
Schedule a no-cost portfolio review with a professional if you want a second opinion.
Up Next In Blog 3, we’ll look at the hidden costs inside your investments and how those quiet fees can eat away at your returns without you even noticing.
If you’re just getting comfortable with investing terms and want a simple, no-fluff resource to build your confidence, download our free guide: Investing 101 for University Employees
