Abstract

https://ssrn.com/abstract=2326774
 


 



The Glidepath Illusion...And Potential Solutions


Robert D. Arnott


Research Affiliates, LLC

Katrina F. Sherrerd


Research Affiliates LLC

Lillian J. Wu


Research Affiliates, LLC

June 30, 2013

Journal of Retirement, vol. 1, no. 2, Fall 2013, pp. 13-28.

Abstract:     
Target-date investment strategies purport to meet the two primary objectives of any retirement savings program: maximizing the real value of investors’ nest eggs while minimizing uncertainty around prospective income in retirement. The authors demonstrate that the classic glidepath approach to retirement investing — moving from equity-centric to bond-centric investing as we age — does not meet these objectives.

The authors summarize the flaws in traditional glidepath implementation and explore illustrative changes to the rules-based, mechanistic solution for retirement planning that can improve the expected outcome for investors, using simulations to test alternatives. Their findings show that, even with simple rules-based approaches, there are better ways to achieve our financial objectives for retirement.

Keywords: Target Date Fund, Glidepath, Retirement Investing, Asset Allocation, Alternative Assets


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Date posted: September 18, 2013 ; Last revised: December 30, 2016

Suggested Citation

Arnott, Robert D. and Sherrerd, Katrina F. and Wu, Lillian J., The Glidepath Illusion...And Potential Solutions (June 30, 2013). Journal of Retirement, vol. 1, no. 2, Fall 2013, pp. 13-28.. Available at SSRN: https://ssrn.com/abstract=2326774

Contact Information

Robert D. Arnott
Research Affiliates, LLC ( email )
620 Newport Center Dr
Ste 900
Newport Beach, CA 92660
United States
949-325-8700 (Phone)
949-325-8901 (Fax)
HOME PAGE: http://www.researchaffiliates.com/Our%20Firm/Our%20Team/Pages/Rob-Arnott.aspx
Katrina F. Sherrerd
Research Affiliates LLC ( email )
620 Newport Center Dr
Ste 900
Newport Beach, CA 92660
United States
949-325-8728 (Phone)
949-325-8928 (Fax)
HOME PAGE: http://researchaffiliates.com/index.htm
Lillian J. Wu (Contact Author)
Research Affiliates, LLC ( email )
620 Newport Center Dr
Suite 900
Newport Beach, CA 92660
United States
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