The Glide Path is Not a Retirement Plan

The investment industry loves the glide path.  The concept is elegant: more equities when you are young, a gradual shift to bonds as retirement approaches.  It manages sequence-of-returns risk.  It simplifies asset allocation.  It makes for excellent marketing.  It does not keep the lights on when you are dead.  It does not pay the oncologist.  It does not fund twenty-five years of retirement after the portfolio runs out.

Here are three things the glide path cannot do — and what does them instead.

One: It Cannot Create an Estate on Day One

In 2025, only 47 per cent of CPF members at age 55 met the Full Retirement Sum of S$213,000.  That means 53 per cent of Singaporeans reaching that milestone lack enough in CPF alone to fund a basic annuity income for life.  The investment portfolio is a supplementary vehicle.  It is not a floor.

Consider what happens when the breadwinner dies at 52 with a 15-year-old portfolio and a surviving spouse.  The portfolio has accumulated, say, S$180,000.  That is not an estate.  That is four years of household expenses in a four-room HDB flat, where the average monthly expenditure is up to S$1,207.  The spouse is not financially intact.  She is managing a drawdown.  A whole life or universal life policy creates an immediate estate from the day the first premium is paid.  The sum assured is available on day one — not after twenty years of compounding, not subject to market timing, not contingent on whether the client managed to maintain contributions during a retrenchment at 48.

The Ministry of Manpower reported in Q1 2026 that retrenchment incidence for workers aged 50 to 59 rose to 3.1 per 1,000 resident employees, the highest rate among working-age cohorts.  A man retrenched at 54 faces eighteen months of job hunting — the average re-employment period for mature PMEs — without CPF contributions, without employer contributions, and with a portfolio that has stopped growing.  The life policy does not care about any of that.  It is in force.  It pays on death regardless of employment status.  The portfolio builds slowly.  The life policy pays immediately.  These are not competing products.  They solve different problems on different timelines.  Presenting one as the substitute for the other is a failure of financial advice, not a feature of modern portfolio theory.

Two: It Cannot Pay While You are Alive but Cannot Work

The LIA Protection Gap Study 2022 found that the critical illness protection gap for economically active Singaporeans stands at 74 per cent.  The recommended coverage is four times annual income.  Most Singaporeans carry a fraction of that.  This is not an abstract risk.  Cancer accounts for 73 per cent of all critical illness claims in Singapore.  Most claims fall between ages 41 and 65 — the peak earning years.  The average critical illness claim payout in Singapore is S$52,343.  The average lung cancer treatment at a private hospital is up to S$273,000 over eighteen months.  Immunotherapy alone costs S$9,000 per dose, every two to three weeks.  The gap between what people are covered for and what treatment costs is not a rounding error.  It is financial ruin dressed up as a medical event.

Here is the scenario the investment literature never models.  A 52-year-old Singaporean professional receives a cancer diagnosis.  He stops contributing to the portfolio — contributions that were compounding at the highest rate of his career.  He begins drawing down the portfolio to fund treatment and bridge his income.  He is simultaneously experiencing what the investment industry calls forced sequence-of-returns risk — drawing down assets during a disruption — and what any competent insurance adviser would call an uninsured critical illness event.

This is not hypothetical.  It is the standard presentation of a mid-career critical illness claim in Singapore.  The LIA’s own data shows that 62 per cent of Great Eastern’s CareShield claims come from people under 50.  The illness does not wait for retirement.  A critical illness plan covering the standard 37 conditions pays a lump sum at diagnosis.  It does not care about the state of equity markets.  It does not wait for the portfolio to recover.  It pays.  The portfolio remains intact.  The client continues to compound.  The family does not sell the flat.  That is not a theoretical benefit.  That is the difference between a client who retires at 65 with his assets intact and a client who limps to 65 having spent his retirement savings on the illness that was supposed to kill him but did not.

Three: It Cannot Fund a Thirty-Year Retirement

Singapore’s Department of Statistics reported in 2025 that a woman aged 65 can expect to live to 88.1 years.  A girl born today has a 64.3 per cent probability of reaching 85.  This is not an outlier scenario.  This is the median.  A target-date portfolio built to last until 85 fails half the women in this country.  The CPF Life scheme provides a base annuity.  It was not designed, and cannot be expected, to fund three decades of inflation, healthcare escalation, and long-term care above the Basic Retirement Sum.

The numbers are stark.  The average monthly expenditure for a retiree in Singapore is S$1,440.  A condominium dweller spends S$2,841 a month.  CPF Life pays out between S$730 and S$1,230 a month for a member on the Standard Plan who sets aside the Full Retirement Sum.  The Enhanced Retirement Sum — the maximum CPF Life top-up — is S$426,000, and it caps the monthly income.  For anyone spending above that ceiling, CPF Life is a partial solution.

Then there is long-term care.  A Singlife analysis of its own claims data from 2010 to 2024 found that the average long-term care claim lasts ten years.  The average monthly spend on long-term care in Singapore is S$2,952, up 27 per cent from S$2,324 in 2018.  CareShield Life pays S$689 a month in 2026.  That covers less than a quarter of the average cost.  Only one in three Singaporeans holds a CareShield Life or ElderShield supplement.  Singlife projects the total ten-year care cost at over S$420,000.

The mathematics is not complicated.  A 65-year-old woman who lives to 90 needs twenty-five years of retirement income.  If she requires care for the final ten of those years, her funding requirement is not a portfolio optimisation problem.  It is an income guarantee problem.  Portfolios fluctuate.  Annuities do not.  A whole life policy with accumulated cash value, or a private annuity layered above CPF Life, creates a guaranteed income floor that no equity drawdown can interrupt.  Private annuities from AIA, Prudential, and Manulife allow clients to lock in income streams that run for life, irrespective of what markets do in year twenty-two of retirement.

What the Glide Path Solves

The glide path is a sensible tool.  It belongs in a retirement plan.  It is not, by itself, a retirement plan.  Managing sequence-of-returns risk matters.  Reducing equity exposure as retirement approaches matters.  Ensuring the portfolio does not get wiped out by a market crash in the final years before withdrawal matters.  None of that substitutes for an immediate estate created by a life policy, a lump-sum payment at diagnosis from a critical illness plan, or a guaranteed income floor from an annuity that outlasts both the portfolio and the client’s optimistic assumptions about how long she will live.

The difference matters most to the 53 per cent of Singaporeans who arrive at 55 short of the Full Retirement Sum.  It matters to the 74 per cent carrying inadequate critical illness coverage.  It matters to the women who will outlive every projection the asset allocators built for them.  The industry promotes glide paths because they are scalable, fee-generating, and simple to explain.  Insurance solutions require a conversation about mortality, illness, and dependency.  Those conversations are uncomfortable.  They are also the ones that determine whether a client’s family is financially intact twenty years from now.

A retirement plan built only on a portfolio is a plan that works until it does not.  The events that break it — early death, serious illness, an unexpectedly long life — are not tail risks.  They are the standard experience of retirement in a country where life expectancy at 65 has just hit 86.6 years.  Plan for the median.  Not the forecast.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code