Life-cycle investing describes the idea that a portfolio may change as goals, time horizons and loss capacity change. Age alone does not determine the direction or pace.
Comparison factors
- Time remaining before a specific goal
- Dependence on the portfolio for near-term spending
- Other assets, income and liabilities
- Ability to tolerate market losses without abandoning the plan
- Liquidity and product constraints
How to use the comparison
Some investors reduce portfolio volatility as a goal approaches. Others may have enough income or separate assets to follow a different path. Any transition depends on the goal and the investor's full position, not a universal glide path.
Illustrative scenario
Illustrative scenario: an approaching home payment may lead someone to review volatility and liquidity for that goal, while retirement assets with a longer horizon are assessed separately.
Common interpretation errors
- Assigning equity percentages by age
- Making automatic age-triggered changes
- Applying one glide path to unrelated goals
Next step
Review each goal's horizon and dependence on the portfolio before considering an allocation change.
Official references
This material is educational and does not provide a personal recommendation. Product rules, costs and tax treatment can change; verify the current official documents before acting.