401k Asset Allocation Calculator

Model target weights, current balances, and allocation gaps. See percentages, dollars, drift, and rebalance trades. Build steadier long term plans using disciplined portfolio adjustments.

This calculator estimates current 401k weights, target weights, rebalance trades, expected return, volatility, concentration, and diversification statistics. It is designed for scenario testing and portfolio review.

Calculator Inputs

US Stocks Balance

International Stocks Balance

Bonds Balance

Cash Balance

US Stocks Target %

International Stocks Target %

Bonds Target %

Cash Target %

US Stocks Expected Return %

International Stocks Expected Return %

Bonds Expected Return %

Cash Expected Return %

US Stocks Volatility %

International Stocks Volatility %

Bonds Volatility %

Cash Volatility %

Correlation: US and International

Correlation: US and Bonds

Correlation: US and Cash

Correlation: International and Bonds

Correlation: International and Cash

Correlation: Bonds and Cash

Reset

Example Data Table

Asset Class	Example Balance	Example Target %	Example Return %	Example Volatility %
US Stocks	$120,000	50	8	18
International Stocks	$40,000	20	7	20
Bonds	$70,000	25	4	7
Cash	$20,000	5	2	1

Formula Used

Current Weight = Asset Balance ÷ Total Portfolio Balance
Normalized Target Weight = Entered Target % ÷ Sum of Entered Targets
Target Dollars = Total Portfolio Balance × Normalized Target Weight
Trade Needed = Target Dollars − Current Balance
Portfolio Return = Sum of Weight × Expected Return
Portfolio Variance = Σ(w²σ²) + 2Σ(wi × wj × σi × σj × ρij)
Portfolio Volatility = Square Root of Portfolio Variance
Diversification Ratio = Weighted Average Asset Volatility ÷ Portfolio Volatility
Effective Number of Assets = 1 ÷ Σ(weight²)
Drift Score = Sum of Absolute Weight Gaps

How to Use This Calculator

Enter your current 401k balances for stocks, bonds, and cash.
Enter target portfolio weights for each asset class.
Add expected return and volatility assumptions.
Set pairwise correlations for the four asset groups.
Click Calculate Allocation.
Review current weights, target weights, trade amounts, and summary metrics.
Use the chart to compare present allocation against target allocation.
Download the output as CSV or PDF if needed.

FAQs

1. What does this calculator measure?

It compares your current 401k allocation with a target mix, then estimates drift, rebalance trades, expected return, volatility, diversification ratio, and concentration metrics from your assumptions.

2. Why are target weights normalized?

If entered targets do not equal 100%, the calculator rescales them proportionally. This preserves your intended allocation pattern while still producing usable rebalance values.

3. How are rebalance trades calculated?

Each trade equals target dollars minus current balance. Positive values suggest adding money. Negative values suggest reducing that asset to reach the chosen mix.

4. What does portfolio volatility mean here?

It is an estimated annualized risk measure based on asset volatilities, portfolio weights, and pairwise correlations. It helps compare current and target portfolios under the same assumptions.

5. Can cash have return and volatility inputs?

Yes. Cash often has low expected return and very low volatility. Including it makes total portfolio estimates more complete, especially for conservative allocations.

6. Why separate US and international stocks?

They can have different return expectations, risk levels, and correlations. Keeping them separate gives a more realistic picture of diversification and target drift.

7. Can I match this to actual plan funds?

Yes. You can map each plan fund into one of these broad buckets, then enter totals by bucket. That keeps the model simple while still supporting practical rebalancing decisions.

8. Is this calculator financial advice?

No. It is an educational scenario tool. Use it to organize assumptions, compare allocations, and discuss choices before making actual retirement plan changes.