The process of turning financial objectives into an actionable portfolio starts with a few simple choices: what you are saving for, when you will need the money, and how you prefer to withdraw it. When you create a goal you can choose from predefined goal types such as Major Purchase, Education, Retirement, Retirement Income, General Investing, and Emergency Fund. The platform also offers separate cash options like the Cash Reserve and crypto options such as the Crypto ETF portfolio, which are managed outside the allocation methodology described here.
Once a goal and an anticipated time horizon are entered, the system recommends an investment mix. That recommendation is not arbitrary: it is produced by projecting a range of market scenarios and selecting the risk profile that performs best on average across the 5th–50th percentiles of those outcomes. Emergency Funds are treated differently because they lack a predictable withdrawal date; the platform will suggest an assumed time horizon for saving and deposit guidance (which you can edit) but that assumption does not change the recommended split for Emergency Funds.
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How recommendations change by goal type
Different objectives call for distinct risk postures because cash needs and withdrawal patterns vary. For long-horizon goals the recommendation can be as high as 90% stocks, while short or immediate goals may approach 0% stocks. For example, both Major Purchase and Education goals can reach 90% stocks (33+ years) when the horizon is decades long and fall to 0% stocks at the target date. General Investing can similarly target 90% stocks (20+ years) and move toward 56% stocks as the horizon is reached. These broad ranges are the backbone of the platform’s allocation guidance.
Retirement and retirement income specifics
Retirement-focused strategies reflect the fact that distributions are often staggered over time. A typical Retirement recommendation may be as aggressive as 90% stocks (20+ years until retirement age) and transition to about 56% stocks (retirement age reached). Retirement Income goals use remaining life expectancy to shape risk: recommendations might start near 56% stocks (24+ years remaining life expectancy) and shift toward 30% stocks (9 years or less remaining life expectancy) as shorter horizons and consistent withdrawals increase the need for capital preservation.
Glidepaths and the auto-adjust feature
A glidepath is the planned, incremental change in allocation as a goal approaches its target date. Glidepaths are designed so the recommended mix grows more conservative as the need for liquidity or principal protection increases. The platform offers an auto-adjust option that follows these glidepaths automatically for eligible investing goals, smoothing allocation changes through small, frequent updates rather than abrupt shifts. This approach preserves the intended risk profile while avoiding concentrated timing moves that could distort outcomes.
Which portfolios and behaviors are included
Auto-adjust applies to most equity and multi-asset suites, including the Betterment Core portfolio, SRI portfolios, Innovation Technology portfolio, Value Tilt portfolio, and the Goldman Sachs Smart Beta portfolio. It does not apply to Emergency Fund goals, the Target Income built with BlackRock portfolio, or the Goldman Sachs Tax-Smart Bonds portfolio. Auto-adjust combines reactive rebalancing (bringing the portfolio back to target after market moves) and proactive rebalancing (small preemptive shifts to stay aligned with the glidepath).
How you can override recommended risk
The system’s default allocation is grounded in what it calls risk capacity—an estimate of how much loss a goal can tolerate given its time horizon and withdrawal plan. If you prefer a different risk profile, an interactive slider lets you change the split between stocks and bonds. The slider offers five settings: Very Conservative (more than 7 percentage points below the recommendation), Conservative (4–7 points below), Moderate (within 3 points of recommended), Aggressive (4–7 points above), and Very Aggressive (more than 7 points above). Choosing a more conservative stance may reduce volatility but can require saving more to reach the same goal; moving toward aggressive increases potential long-term returns at the cost of greater short-term drawdowns.