What is a glide path in retirement?
A retirement glide path is the planned shift from higher-risk (stocks) to lower-risk (bonds/cash) investments as you age, typically moving 1–2% out of equities per year. Target-date funds automate this, usually landing at 40–60% stocks at retirement and continuing to de-risk for 20–30 years afterward.
Formula
Simplified rule: Stock % = 110 minus your age (traditional). Pfau/Kitces rising glide: Start at 30% stocks at retirement, increase ~1–1.5% per year to a max of 60–70%.
Example
A 65-year-old retiree using the traditional rule: 110 − 65 = 45% stocks, 55% bonds. Using the Pfau/Kitces rising glide path: Start at 30% stocks at 65, increase to 60% by age 85, reducing sequence-of-returns risk in the critical first decade of retirement.
How it works in detail
A glide path defines how your asset allocation changes over time — both before and after retirement. The term comes from target-date funds, which automatically reduce equity exposure on a predetermined schedule as you approach and pass your target retirement year. Two schools of thought exist on how a glide path should behave in retirement: 1. Traditional declining glide path: Continues reducing equity exposure through retirement (e.g., from 60% stocks at age 65 to 30% by age 85). This is the conventional wisdom and the approach used by most target-date funds. 2. Rising equity glide path: Research by Wade Pfau and Michael Kitces (2014) found that starting retirement with a lower stock allocation (e.g., 30%) and gradually increasing to 60–70% over 20–30 years actually reduces sequence-of-returns risk. The logic: if a crash hits early in retirement, a lower equity exposure limits damage; once the portfolio has survived 10–15 years, it can tolerate more risk. For FIRE retirees with 40–50 year horizons, the traditional declining glide path risks running out of stocks — and growth — too early. Pfau's research suggests a V-shaped glide path (decline into retirement, rise through it) may be optimal for very early retirees. Most planners recommend no lower than 50% equities in retirement to protect against longevity risk.
Use Rightmont's retirement calculator to stress-test different glide paths against your specific retirement timeline.
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What is the right asset allocation (stocks vs bonds) by age?
A common starting rule: hold your age in bonds (30 years old = 30% bonds, 70% stocks). But modern research suggests more aggressive: 110 minus your age in stocks. A 35-year-old with 30+ years to retirement should hold 75–90% stocks. Reduce to 50–60% stocks by retirement age.
What is sequence of returns risk?
Sequence of returns risk is the danger that poor market returns in the first few years of retirement permanently damage your portfolio, even if long-term average returns are normal. A -20% crash in year 1 of retirement is far more destructive than the same crash in year 10, because you're withdrawing from a shrinking base.
How much of my portfolio should be in bonds when I retire?
Most retirement research supports holding 30%–50% bonds in early retirement to buffer sequence-of-returns risk, with a common starting point of 40% bonds at age 65. However, early retirees (40s–50s) often hold 20%–30% bonds given longer growth horizons. The right allocation depends on your withdrawal rate, spending flexibility, and other income sources.
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