Expert insight

Selecting an optimal glide path for Target Retirement Funds

August 04, 2022

Q&A

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How does Vanguard view the evolving role of target date funds?
What framework considerations does Vanguard use when measuring the success of a Target Retirement Fund glide path?
What are the circumstances we consider when using these simulation models to develop potential retirement glide paths?
The illustration displays seven input variables (risk tolerance, retirement age, life expectancy, withdrawal rate, savings rate, guaranteed income, and the Vanguard Capital Markets Model market return projections) that lead into the Vanguard Life-Cycle Model. The Vanguard Life-Cycle Model evaluates the existing glide path against thousands of simulated glide paths. The combination of inputs and selected Vanguard Life-Cycle Model inform the optimal retirement glide path.
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