The fragile-decade problem
The five years before and after retirement carry the highest sequence-of-returns risk an investor will face. Two responses that have meaningful academic support both raise bond allocation around the retirement date — they differ on what happens afterward.
The bond tent
The bond tent (Kitces / Pfau) raises bond allocation from a working-age baseline (e.g., 30%) up to a retirement-date peak (e.g., 60%), then reduces bond allocation back down over the next 10–15 years. The intent is to defend the fragile decade, then re-engage equity once the early-retirement loss-locking risk has receded.
Rising-equity glidepath
The rising-equity glidepath is the post-retirement half of the bond tent. Equity rises from roughly 30–40% at retirement to 60–70% by age 80. The counterintuitive math: portfolios that survived the fragile decade have already passed their highest-risk window, and rising equity exposure improves long-horizon survivability.
Side-by-side comparison
| Age | Traditional declining glidepath | Bond tent / rising-equity |
|---|---|---|
| 55 | 65% | 55% |
| 60 | 55% | 45% |
| 65 | 45% | 35% |
| 70 | 40% | 45% |
| 75 | 35% | 55% |
| 80 | 30% | 65% |
Implementation rules
- Define the retirement-date allocation 5 years out — do not change it inside 12 months of retirement.
- Set rebalancing bands (e.g., ±5% per asset class), not calendar rebalancing alone.
- Hold the equity glidepath inside tax-advantaged accounts where possible to keep rebalancing tax-free.
- Rebalance into equity during drawdowns — not away from it.
- Treat Social Security and pensions as bond-equivalent income; the portfolio glidepath is on top of that floor.
Stephen Arnold
Founder & CEO of Wealth Protection Advisory. Pension and retirement planner with 20+ years advising small business owners. Creator of the Designer DB Plus® strategy and author of Designer DB Plus® Game-Changing Tax Reduction & Retirement Strategy.