Glidepath risk
InvestingDefinition
The risk that automatic de-risking schedules in target-date funds underperform a fixed, ageappropriate allocation. 2008 showed that aggressive glide paths in 2010 funds (50%+ equity exposure right at retirement) caused massive losses for retirees with no time to recover.
Post-2008 reform: many TDF providers reduced peak equity allocation; however, equity-heavy TDFs are again common 2020-2025.
Post-2008 reform: many TDF providers reduced peak equity allocation; however, equity-heavy TDFs are again common 2020-2025.