How to Design Your Personal Retirement Glide Path Story

How to Design Your Personal Retirement Glide Path

A “glide path” describes how your asset allocation is expected to change over time. The traditional sentiment is that the percentage allocated to stocks should decrease as you approach and enter retirement.

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The concept is perhaps best known with regards to Target Retirement and Lifecycle funds where you pick the “Fund of Funds” by the date of retirement.

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How to Design Your Personal Retirement Glide Path

1. Decrease Your Stocks By Age

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2. Decrease Your Stocks by Time to Retirement

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The glide path looks like this: 1. 0-10% = 100% stock 2.11-30% = 80% stock 3. 31-60% = 70% stock 4. 61-90% = 60% stock 5. 91-110% = 50% stock 6. 111%-150% = 40% stock

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4. Why Decrease Stocks At All?

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How to Design Your Personal Retirement Glide Path

A “glide path” describes how your asset allocation is expected to change over time. The traditional sentiment is that the percentage allocated to stocks should decrease as you approach and enter retirement.

The concept is perhaps best known with regards to Target Retirement and Lifecycle funds where you pick the “Fund of Funds” by the date of retirement.

How to Design Your Personal Retirement Glide Path

1. Decrease Your Stocks By Age

2. Decrease Your Stocks by Time to Retirement

The glide path looks like this: 1. 0-10% = 100% stock 2.11-30% = 80% stock 3. 31-60% = 70% stock 4. 61-90% = 60% stock 5. 91-110% = 50% stock 6. 111%-150% = 40% stock

3. Decrease Stocks By Percent of “Enough”

4. Why Decrease Stocks At All?

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