Comprehensive Guide
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How it works
A rising equity glidepath — the bond tent — inverts conventional wisdom at the worst moment of retirement planning: instead of holding a static mix forever, you DESCEND into retirement heavily protected, bottoming near 20–30% equities on retirement day, then let equity exposure CLIMB a couple of points per year through mid-retirement. Published research popularized by Kitces and Pfau found that historical failure rates often improved when the riskiest years — the first decade of withdrawals — met the least stock exposure, with growth rebuilt afterward once sequence danger faded. The shape explains its nickname: allocation rises into retirement, peaks in defensive posture, then relaxes. This builder renders the entire timeline from five numbers — today's mix, years remaining, the trough, the climb rate, and the eventual ceiling — and translates the trough into dollars, because a 30% equity floor on $500,000 means $350,000 of bonds and cash earmarked to spend through bear markets. Growth, rebalancing and taxes are ignored by design so the SHAPE stays legible; re-derive dollars annually as balances move.Formula
Working years: equity glides linearly toward the trough | Retired years: equity += rise points/year, capped | Cushion = portfolio × (1 − trough%)
Tips
- The trough matters most — fund 1–2 spending years in cash above the bond sleeve.
- A 30% trough with a 2-point rise reaches mid-50s% equity around retired year 13.
- Start descending 5–10 years out; abrupt shifts near retirement invite mistimed trades.
- If early retirement coincides with a crash, the tent buys years of not selling stocks.
- Revisit the ceiling later — longevity may argue for more growth than the tent allows.
Frequently asked questions
What is a rising equity glidepath?
It is a retirement allocation that starts LOW in stocks — often 20–30% on retirement day — and rises steadily afterward, reaching 50–60%+ by mid-retirement. The design minimizes equity exposure exactly when sequence-of-returns damage bites hardest, then rebuilds growth for the long tail.
Why hold fewer stocks at retirement than during working years?
Because withdrawals turn temporary declines into permanent losses. A retiree selling shares through a 40% crash locks prices in; a saver simply keeps buying. Reducing stocks to ~30% while withdrawals begin historically cut failure odds versus static mixes in published sequence research.
How fast should equity rise after retirement begins?
Commonly one to four percentage points yearly. At two points from a 30% start, exposure passes 50% around retired year eleven. Faster climbs rebuild returns sooner but re-expose the portfolio to late sequence shocks; slower climbs sacrifice growth longer for safety.
Is a bond tent better than a fixed 60/40 in retirement?
Historical simulations favored the tent for withdrawal-phase survival because its low-equity trough covers the vulnerable first decade, while 60/40 carries full equity risk immediately. The tradeoff is complexity and lower expected returns early — there is no free lunch, just relocated risk.
When should I start building the bond tent?
Typically five to ten years before retirement, gliding down gradually rather than de-risking overnight. A ten-year descent from 70% to 30% equities moves about four points yearly — achievable through contributions and rebalancing without dramatic single-year sales or tax surprises.