How a glide path changes a portfolio as its goal nears

What is a glide path in plain terms?

A glide path is a rule that fixes, in advance, how much of a portfolio sits in growth assets at each distance from the goal. Growth assets are those that can rise a lot and fall a lot, such as shares. The rest sits in steadier holdings such as government bonds.

The word comes from aviation. A pilot does not drop from cruising height at the runway. The descent is planned from a long way out, so the aircraft comes down along a slope to the runway.

The schedule has two parts: where it starts and where it ends. Between them is the taper, the stretch over which the risky share comes down. Everything else in a glide path, including how fast it tapers, is a design choice made before the first rupee goes in.

Why does money due soon need a different mix from money due later?

Time is what lets a portfolio sit through a fall. A fall that arrives with twenty years left can be waited out. The same fall with six months left lands on money that is about to be spent.

Take ₹50 lakh set aside for a goal, as an illustration and not a forecast. Suppose 80 percent sits in a risky sleeve, which is ₹40 lakh. If that sleeve drops 30 percent, the loss is ₹12 lakh (₹40 lakh times 0.30), and the pot is ₹38 lakh.

Now suppose only 20 percent sits in the risky sleeve, which is ₹10 lakh. The same 30 percent drop costs ₹3 lakh (₹10 lakh times 0.30), and the pot is ₹47 lakh.

The drop in the sleeve is identical in both cases. What changed is how much of the goal was exposed to it, and a glide path schedules that exposure.

The goal date also fixes the damage. A fall early in the plan gets time to recover, and a fall near the date does not. This is why the same drawdown is a nuisance at one distance from the goal and a failure at another. For the full logic, read why the date your money is due sets the horizon.

How does India's NPS apply a glide path?

The clearest public example in India is the lifecycle choice inside the National Pension System. The pension regulator PFRDA designed a set of auto-allocation options that move equity down with the subscriber's age.

Reports dated 24 October 2025 and 27 October 2025 describe the options. The central government extended two of them, LC75 and the Balanced Life Cycle option (BLC), to its employees under the NPS and the Unified Pension Scheme. These are the figures those reports give:

• LC25 holds at most 25 percent in equity, tapering from age 35 to 55.
• LC50 holds at most 50 percent in equity, tapering from age 35 to 55.
• LC75 holds at most 75 percent in equity, tapering from age 35 to 55, and reaches 15 percent by age 55.
• BLC is a variant of LC50 that keeps equity higher until age 45, and it reaches 35 percent by age 55.

Source: Business Standard report on the NPS and UPS life cycle options, published 24 October 2025, read 29 October 2026. The Angel One summary of the PFRDA-approved matrix, published 27 October 2025, read 29 October 2026, gives the same LC75 start and end.

Two details deserve attention. LC75 gives up 60 percentage points of equity (75 minus 15) over the 20 years from age 35 to 55. If the taper ran as an even line, that would be 3 percentage points a year (60 divided by 20). The reports give the start and the end but not each year's step, so treat 3 points a year as arithmetic on the endpoints and not as the published table.

The second detail is that the BLC and LC50 share a base and differ in timing. BLC holds its equity longer and then comes down, ending at 35 percent by 55. Two schedules with the same starting share and different tapers are two different decisions about the same goal.

What decisions sit inside any glide path?

Every glide path answers four questions, and a reader can ask them of any product that claims to have one.

Decision 1: where does it start?

The opening share is the largest bet in the schedule. LC25, LC50 and LC75 differ at the start (25, 50 and 75 percent) and that single choice shapes everything after it. A higher start suits a goal that is far away and a stomach that tolerates a deep fall.

Decision 2: where does it end?

The ending share says how much risk remains on the goal date. LC75 ends at 15 percent and BLC at 35 percent by age 55.

Decision 3: when does the taper begin and how steep is it?

The NPS options begin the taper at age 35. BLC delays it until 45. A late and steep taper compresses the selling into fewer years, so more of the exit happens in whatever market those years bring. An early and gentle one spreads the same selling across more markets.

Decision 4: what does it hold on the safe side?

The steadier sleeve is a decision as well. The sources above describe government securities, corporate bonds and equities as the mix, but a glide path is only as steady as the holdings it moves into.

A schedule that cuts risk by moving into something equally exposed to the same shock has changed the label while the exposure stays where it was. For how those choices sit before any single pick, see what asset allocation decides before any pick.

What does a glide path not do?

A glide path leaves the market's direction open, and the figures above describe a design, not a result. A portfolio that began as too large a bet stays one for the early years of the schedule.

It also leaves out your own situation. An age-based schedule assumes an age-based goal. If your goal date is a house purchase in four years, the age 35 to 55 taper of an NPS option describes a different goal from yours.

The schedule also cannot remove a fall inside the taper. LC75 holds more than its closing 15 percent in equity until the taper is done, and a hard fall in that stretch still costs money. The schedule puts the largest exposure where the runway is longest.

How do you build a glide path for a goal of your own?

The mechanics are short and every step can be done on paper.

Step 1: write the goal and its date

A ₹5 lakh lump sum due in three years is a different problem from ₹25,000 a month for twenty years. Write the amount and the date before you write any percentage.

Step 2: choose a start and an end

Decide the risky share at the beginning and the share you can tolerate on the date. Test the end share against the loss arithmetic above: multiply the risky amount by a fall you could not stomach.

For a ₹1 crore portfolio, a 3 percent position is ₹3 lakh. A 40 percent fall in that position costs ₹1.2 lakh (₹3 lakh times 0.40), which is 1.2 percent of the whole. The same fall in a 50 percent position costs ₹20 lakh. Size the end share so the second number is one you accept.

Step 3: set dates for the steps

Pick the dates on which the share changes, for example each year on the same day, and write the new target for each. A schedule written before the market moved is hard to argue with in the middle of a fall.

Step 4: rebalance back to the schedule

Prices move the actual mix away from the written one. When the risky sleeve has grown past its target, sell the excess. When it has shrunk below, add to it. For the mechanics of that sale, see how a position is sized to survive a drawdown.

What this means for a disciplined investor

A glide path turns the question of how much risk to hold into a dated table, written before any fall and followed through one.

The reader who holds a portfolio already has goals with dates on them. Each date deserves its own schedule, and the money due soonest should carry the smallest risky share. The next question is what the safe side of a schedule should hold.

Frequently asked questions

What is a glide path in investing?

A glide path is a fixed schedule that lowers the share of risky assets in a portfolio as the goal date nears. India's NPS LC75 option, for example, goes from 75 percent equity up to age 35 to 15 percent by age 55.

How does the NPS LC75 glide path work?

LC75 holds up to 75 percent in equity and tapers that share from age 35 to age 55, reaching 15 percent at 55. The Balanced Life Cycle option keeps equity higher until age 45 and reaches 35 percent by age 55.

Does a glide path guarantee the goal amount?

No. A glide path limits how much of the portfolio is exposed to a fall near the goal date. It makes no promise about the amount, and the NPS figures describe a design and not a result.

Is a glide path only for retirement?

No. Any goal with a date can carry one, such as a house purchase or a child's fees. The schedule runs on the distance to the date, and age is only the usual stand-in for it in pension products.

How often should a glide path be rebalanced?

Often enough to keep the actual mix near the written schedule. One fixed date a year for the step down, with the mix checked the same day, is a simple rule to hold to.

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