If you become bearish about the stock market, it will reset your allocation towards bonds and cash. As you age, it will adjust your mix. If you use this worksheet to allocate only your retirement accounts, and you have more than ten years to retirement, remember to set both spending scales to zero. The longer you have to save and invest, the less you have to cut back your exposure to equities. Over time spans of 20 years or more, the ups and downs of global stock markets always favor the ups.
Average equity returns eventually leave bond and cash returns in the dust.
As you age, equity strategies remain an important part of wealth building. But wealth preservation becomes increasingly important as you near retirement. The more dependents you have, the more you'll need to spend, and therefore the more cautious you need to be with your investments. Many people tend to overestimate their tolerance for market volatility. If the answer to any of these questions is yes, you may want to set your risk tolerance no higher than medium.