Rising Equity Glidepath: Should You Hold More Stocks in Retirement?

The conventional wisdom is backwards

Standard retirement advice — embedded in every target-date fund — says you should hold fewer equities as you age. The logic: equities are volatile, retirees need stability, the bond allocation should rise smoothly toward the date and beyond.

That advice is empirically wrong for FIRE planners. Wade Pfau and Michael Kitces published a paper in 2014 ("Reducing Retirement Risk with a Rising Equity Glide Path") that argued the opposite: start retirement with more bonds, and gradually shift toward more equities over time. The data supports them.

The mechanism

Sequence-of-returns risk is heavily concentrated in the first 10 years of retirement. A 30% equity drop in year 2 is catastrophic; the same drop in year 25 is mildly inconvenient. The Pfau-Kitces insight: structure your allocation so it's defensive when sequence risk is highest, and aggressive when sequence risk has passed.

Specifically:

• Years 1–5: 30–40% equities, 60–70% bonds. Bond-heavy positioning protects against early crashes.
• Years 6–10: gradual transition through 50/50.
• Years 11–15: continue gliding to 70–80% equities.
• Years 16+: 70–80% equities maintained.

By the time you've reached the post-danger-zone equity allocation, you've already survived the most dangerous part of retirement. The high equity weight then compounds for the rest of your life.

What the data shows

Pfau and Kitces simulated 30-year retirements against US historical data with three allocation strategies:

1. Static 60/40 throughout retirement
2. Declining glidepath — 60/40 at start, 30/70 at end
3. Rising glidepath — 30/70 at start, 70/30 at end

For the median cohort, all three produced similar terminal wealth. The interesting result was the worst-case cohorts:

• Static 60/40: 25% chance of failure at 4% over 30 years
• Declining: 33% chance of failure
• Rising: 9% chance of failure

The rising glidepath cut tail risk by roughly two-thirds compared to the standard declining approach. For FIRE planners with 50-year horizons, the benefit is even more pronounced — the early bond protection becomes more valuable as the post-protection equity tail extends.

Why it isn't more popular

Three reasons the conventional declining glidepath persists despite the evidence:

1. Target-date funds are built around it. The industry standard is a smooth equity decline through retirement. Changing that would require redesigning a trillion-dollar product category.
2. Behavioural objection. Telling retirees to increase equities after age 60 feels reckless to most advisers. The math agrees with the data; the advisers don't always.
3. Loss-aversion intuition. Most people see "more equities = more risk", and most retirement planning has been calibrated around that gut feeling rather than around sequence-risk math.

How to implement it

The simplest version: hold a 50/50 portfolio in the years approaching retirement, drop to 30/70 at the retirement date, and shift back to 70/30 over the next 15 years through new bond drawdowns. Each year, sell more from bonds than from equities until the target ratio is achieved.

A practical 5-year breakdown for a 50-year retirement:

• Year 0 (retirement): 30/70
• Year 5: 40/60
• Year 10: 55/45
• Year 15: 70/30
• Years 15+: 70/30 maintained

Pair this with a 1–2 year cash buffer (see our cash buffer article) and you've stacked two of the most effective sequence-risk mitigations.

The relationship to bond tents

Rising equity glidepaths overlap conceptually with "bond tents" — the strategy of building up bond exposure in the 5 years before retirement and gliding back down in the 5 years after. The two combined create a kind of bond mountain centred on the retirement date, when sequence risk is highest. Our bond tents article covers the pre-retirement half of the strategy in detail.

When this might be wrong for you

Three situations where a rising glidepath underperforms:

• You have ample external income (state pension, rental, part-time work). Less portfolio dependence means less sequence risk to insulate.
• You can't tolerate the late-life equity weight emotionally. The strategy requires holding 70%+ equities at age 70+. If that's psychologically untenable, a flatter allocation is the realistic choice.
• You're targeting bequest rather than spending. If maximum terminal wealth matters more than survival probability, a static 80/20 or 100/0 allocation usually wins.

For the typical FIRE planner who wants robust survival and lifetime spending, the rising glidepath is one of the highest-impact strategic choices available. Test it against your own plan in our withdrawal survival tool and compare the survival curve to a static allocation.