Glide path
Personal FinanceDefinition
A schedule for shifting your asset allocation over time, typically becoming more conservative as you approach a goal date. The defining feature of target-date retirement funds: a 2055 fund holds ~90% stocks today; the same fund in 2050 will hold ~50% stocks; by 2065 it might be 30% stocks.
Glide paths reduce sequence-of-returns risk near retirement (a 30% drawdown is devastating in your first retirement year, fine in your 30s). Trade-off: lower expected long-run growth.
Glide paths reduce sequence-of-returns risk near retirement (a 30% drawdown is devastating in your first retirement year, fine in your 30s). Trade-off: lower expected long-run growth.
Example
A target-date 2050 fund: 30 years to retirement → ~90% stocks; 15 years → ~75% stocks; at retirement → ~50%; 10 years into retirement → ~30%. The path is the most important design choice in any TDF.