Asset Allocation Drift Calculator
Deviation from target allocation triggering rebalance.
Calculate drift between current and target asset allocation to decide if rebalancing is needed. Enter equity to see drift percentage and rebalance flag.
What this tool does
Enter current and target allocations. The tool shows drift percentage and rebalance flag.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Target 60% equity / 40% bonds, current 68% / 32%: 8 percentage point drift. Threshold-based rebalancing typically 5% drift triggers action. Under 5%: hold. 10%+ often warrants rebalance — extended drift changes risk profile meaningfully.
Quick example
With current equity of 68% and target equity of 60% (plus rebalance threshold of 5%), the result is 8.00 percentage points. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Current Equity %, Target Equity %, and Rebalance Threshold. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.
What's happening under the hood
Standard drift calculation. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
Why investors run this
Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.
What this doesn't capture
Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.
Where to go next
This calculation rarely sits alone in a planning exercise. If you're running these numbers, you'll probably also want the portfolio rebalancing calculator, the portfolio rebalancing frequency calculator, and the digital asset portfolio calculator — each one answers a different question in the same territory. Treating them as a set rather than in isolation usually produces a more honest picture.
Allocation drift produces a deviation figure based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Standard drift calculation.
References
Frequently Asked Questions
Typical threshold?
Tax-efficient rebalance?
Volatile drift?
Age-based shift?
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