In investing, a “glide path” is the formula used for changing your asset allocation to take progressively less stock risk as the ending date of your goal nears. Many retirement-oriented target-date funds are based on a glide path (though every firm has its own formula).
At Betterment, we adjust the recommended allocation and portfolio weights of the glide path based on your specific goals and time horizon. This means Betterment glide path recommendations are more personalized to your specific goals and investment horizons than a target date fund. You can read more here.
Additionally, we put you in control of your glide path. Betterment recommends what we believe is the best glide path for you to reach your goal while minimizing the chance of loss over time in your account. However, it is up to the investor to change the actual portfolio allocation. This allows for increased customization for each investor at the individual level. We do automatically adjust the target allocation of Betterment for Business 401(k) participants who have not made changes to the recommendations that we initially provide.
With retirement goals, Betterment’s recommended glide path assumes you will spend the money to live over time throughout retirement, rather than all at once at your retirement age, like you might with other spending goals. Therefore, when you reach retirement age, a more aggressive allocation is recommended versus a spending goal, for example. This is because you still have many years during retirement where you can allow your investments to grow before they are needed for spending. If you’d like to understand more about how this advice works for each goal type, you can read more here.
When an employee joins the firm, they may not be eligible to join the plan right away. Eligibility varies by company and by plan, but is usually contingent upon being at the company for a period of time. Once an employee is eligible to join the plan, they can start contributing a portion of their paycheck to their 401(k) account.
At Betterment, we adjust the recommended allocation and portfolio weights of the glide path based on your specific goals and time horizon. This means Betterment glide path recommendations are more personalized to your specific goals and investment horizons than a target date fund. You can read more here.
Additionally, we put you in control of your glide path. Betterment recommends what we believe is the best glide path for you to reach your goal while minimizing the chance of loss over time in your account. However, it is up to the investor to change the actual portfolio allocation. This allows for increased customization for each investor at the individual level. We do automatically adjust the target allocation of Betterment for Business 401(k) participants who have not made changes to the recommendations that we initially provide.
With retirement goals, Betterment’s recommended glide path assumes you will spend the money to live over time throughout retirement, rather than all at once at your retirement age, like you might with other spending goals. Therefore, when you reach retirement age, a more aggressive allocation is recommended versus a spending goal, for example. This is because you still have many years during retirement where you can allow your investments to grow before they are needed for spending. If you’d like to understand more about how this advice works for each goal type, you can read more here.
When an employee joins the firm, they may not be eligible to join the plan right away. Eligibility varies by company and by plan, but is usually contingent upon being at the company for a period of time. Once an employee is eligible to join the plan, they can start contributing a portion of their paycheck to their 401(k) account.