FIRE glossary
Glide Path
A pre-planned, gradual shift in a portfolio's asset mix over time — typically moving from growth-focused assets toward capital preservation as retirement gets closer.
Why shift allocation at all
Most glide paths exist because of sequence-of-returns risk: a market fall in the years right before or after you stop working does far more damage than the same fall a decade into retirement, because you're drawing the portfolio down rather than adding to it. Holding a larger share in equities early — when there's time to ride out a downturn — and shifting toward bonds and cash as retirement nears is a common attempt to blunt that specific risk, not to maximise long-run return.
The common shapes
Target-date retirement funds are the best-known example: a single fund that automatically shifts its own mix as the target year approaches, usually from mostly equities down to a mix weighted toward bonds. A do-it-yourself glide path does the same thing manually, on whatever schedule and end-point the investor sets themselves. Some FIRE planners instead run a "rising equity glide path" — deliberately holding more bonds at the point of retirement and increasing the equity share afterward — on the theory that the first few retirement years carry the most sequence risk and the portfolio can afford to take on more growth exposure once that period has passed. There's no single correct shape; each trades growth for stability differently.
What Ember does and doesn't do here
Ember's projection engine deliberately holds your asset allocation and return assumption constant across the whole plan — it doesn't apply an automatic glide path or annual rebalancing behind the scenes. That's a real limitation worth knowing: if you're actually running a glide path, a single constant-return Ember projection won't reflect the changing risk-and-return profile year by year. Update your holdings or return assumption manually as your real allocation shifts, and treat the resulting numbers as a snapshot for your current mix rather than a plan that already knows your glide path is coming.
Across borders
A glide path usually assumes you'll sell winners and buy safer assets as you go — and that action can be a taxable event, with the rules varying sharply by country and account type. Selling equities to fund a bond purchase inside a UK ISA or SIPP is tax-free; the same trade in a taxable brokerage account elsewhere can trigger capital gains tax, and some jurisdictions tax gains on bonds and cash-equivalents differently again (see the tax-drag-on-withdrawals term). "Capital preservation" is also currency-specific: a glide path built around your home-currency bonds doesn't protect purchasing power if you plan to retire spending in a different currency, so an expat's glide path has to reckon with currency risk on top of the usual equity-to-bond shift.
Common questions
Does a glide path guarantee a safer retirement?
No. It trades some long-run growth potential for less exposure to a bad run of markets right before or after you stop working — a real trade-off, not a free upgrade. A glide path that de-risks too early can also just mean lower returns for years, with no crash to show for the caution.
Does Ember build or manage a glide path for me?
No. Ember's projection engine holds your asset allocation and the return it implies constant across the whole plan — from today through retirement — and doesn't model annual rebalancing or an automatic shift in mix over time. If you want to approximate a glide path's effect, you'd currently do it by hand: build a second scenario using the allocation you'd hold later in retirement and compare it against your current one, or update your actual holdings and return assumptions as your real allocation shifts and let Ember recompute from there.
How is a glide path different from rebalancing?
Rebalancing corrects a portfolio back to whatever its current target allocation is, after markets have pushed it off-target — the target itself doesn't move. A glide path deliberately moves the target over time; rebalancing is usually the mechanism used to keep hitting a moving target as it shifts.
Related terms
See glide path in your numbers
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