Target-Date Funds and Glide Paths

CFA Level III: Wealth Management and Institutional Investing · 4:46

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Lyrics

[Verse 1]
When you're young and just starting out
Your retirement seems so far
Target-date funds take away the doubt
They'll guide you like a shining star
Pick the year you plan to retire
Fund does all the work for you
Starts aggressive when time's not dire
Ninety percent stocks to help you grew

[Chorus]
Glide path down, glide path down
As the years go rolling by
Stocks decrease, bonds increase
Target-date will modify
Time horizon, risk precision
Asset allocation's key
Glide path down to safer ground
That's how retirement should be

[Verse 2]
In your thirties, still decades away
Eighty-five percent in equity
Growth potential leads the way
Market volatility's no worry
But as you hit your forties now
The glide path starts to shift around
Seventy percent stocks somehow
Bonds are gaining safer ground

[Chorus]
Glide path down, glide path down
As the years go rolling by
Stocks decrease, bonds increase
Target-date will modify
Time horizon, risk precision
Asset allocation's key
Glide path down to safer ground
That's how retirement should be

[Bridge]
Fifties bring more bonds your way
Sixty-forty split takes hold
Sixties mean your target's near
Fifty-fifty, less risk to bear
Retirement day, the glide continues
Thirty stocks and seventy fixed
Protection mode but growth continues
Conservative but still well-mixed

[Verse 3]
Pension plans love target-dates
Employees need not choose their mix
Automatic escalates
No rebalancing they need to fix
Default option that makes sense
Age-appropriate from the start
Reduces cognitive expense
Professional management's art

[Final Chorus]
Glide path down, glide path down
As the years go rolling by
Stocks decrease, bonds increase
Target-date will modify
Set and forget, no regret
Target-date funds pave the way
Glide path down to safer ground
For your golden retirement day

[Outro]
Target-date funds, glide path down
Your retirement safe and sound

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