Top 10 'Glide-Path-Perfecting' Investment Strategies to Master in the Final Decade Before Retirement - Goh Ling Yong
The final decade before retirement is one of the most critical periods in your financial life. Think of it as the final approach of an airplane. For decades, you've been climbing, focused on gaining altitude—accumulating wealth through growth-oriented investments. Now, as you near your destination, the focus must shift from climbing to a smooth, controlled descent. This is your retirement "glide path," and mastering it is the key to a safe and comfortable landing.
This transition isn't just about changing a few investments; it's a fundamental shift in mindset. You're moving from being a wealth accumulator to a wealth preserver and, eventually, a wealth distributor. The strategies that got you here, like aggressive growth and high-risk tolerance, may not be the ones that will safely get you to and through retirement. Volatility, which was once your friend, can become a significant threat when you're about to start drawing down on your portfolio.
In this comprehensive guide, we'll walk through the ten essential investment strategies you need to master during this crucial ten-year window. These aren't just abstract theories; they are practical, actionable steps designed to reduce risk, secure your income, and give you the confidence to step into retirement knowing you’re financially prepared. Let’s perfect that glide path.
1. Master Your Glide Path: Systematically De-Risking Your Portfolio
The Concept: The "glide path" is the gradual, deliberate process of shifting your asset allocation from higher-risk assets (like equities) to lower-risk assets (like bonds and cash) as you approach your retirement date. Forgetting to do this is like flying a plane at full speed toward the runway—it makes for a very bumpy landing. The goal is to lock in the gains you've made and reduce the impact of a sudden market crash right before you need to start withdrawing money.
The Strategy: This isn’t a one-time event but an annual process. If you’re 10 years out from retirement, your portfolio might be at a 70/30 or 60/40 split between stocks and bonds. Each year, you can systematically shift a small percentage—say, 2-3%—from stocks to bonds. By the time you retire, you might be at a more conservative 50/50 or even 40/60 allocation. This disciplined approach prevents emotional decision-making and ensures you’re progressively insulating your portfolio from equity market volatility.
Pro-Tip: While Target-Date Funds automate this process, a personalized glide path allows for more control. Create a simple schedule. For example: "At age 55, my allocation is 65% stocks, 35% bonds. Each year on my birthday, I will rebalance to decrease my stock allocation by 2% and increase my bond allocation by 2%." This transforms a daunting task into a simple, annual to-do item.
2. Conduct a 'Retirement Fire Drill': Stress-Test Your Plan
The Concept: You wouldn't trust a new building without a fire drill, so why trust your retirement plan without stress-testing it? A "retirement fire drill" involves running simulations to see how your portfolio and income plan would hold up under adverse conditions. This isn’t meant to scare you; it’s designed to build resilience by identifying potential weak spots before they become real-world problems.
The Strategy: The goal is to answer the tough "what if" questions. What if the market drops 25% the year after you retire? What if inflation averages 4% for a decade instead of 2%? What if you face an unexpected healthcare expense of $50,000? By modeling these scenarios, you can see if your plan is robust or fragile. If your plan breaks under pressure, you still have time to fortify it by saving more, adjusting your expected retirement date, or building bigger buffers.
Pro-Tip: Use online retirement calculators with Monte Carlo simulation features, or work with a financial advisor to run these tests. A key scenario to model is "sequence of returns risk"—the danger of a market downturn in the first few years of retirement. Seeing how your portfolio survives this test can provide immense peace of mind or serve as a crucial wake-up call.
3. Build Your 'Income Bridge': Layering Retirement Income Streams
The Concept: In your working years, your focus is on the total value of your portfolio. In the final decade before retirement, your focus must pivot to a different number: your reliable, monthly retirement income. You need to build a sturdy "bridge" of income streams that will carry you through retirement. Relying on just one source is risky; a diversified income plan is key.
The Strategy: Think of your income in layers. The base layer should be guaranteed, predictable income that covers your essential living expenses (housing, food, healthcare). In Singapore, this is where CPF LIFE shines. The next layer can come from more stable, income-producing assets like a bond ladder, high-quality dividend stocks, or rental properties. The top layer, for discretionary spending, can be funded by systematic withdrawals from your growth-oriented assets.
Pro-Tip: Create a retirement income statement. On one side, list all your essential and discretionary expenses. On the other, list your projected income from every source: CPF LIFE, annuities, dividends, bond interest, and planned portfolio withdrawals. As a financial planner, this is a core exercise I undertake with my clients at the Goh Ling Yong advisory. It visually shows you if there are any income gaps you need to fill before you hand in your resignation letter.
4. Optimize for Tax-Efficiency: Keep More of What You Earn
The Concept: Taxes can be a significant drag on your retirement savings, and the decade before you retire is your last best chance to get your house in order. A tax-efficient strategy ensures that you minimize the amount of your hard-earned money that goes to the government, both now and during your withdrawal phase.
The Strategy: This involves understanding the tax treatment of your different accounts and assets. For those with international investments, it means positioning assets smartly—placing income-producing assets like bonds in tax-advantaged accounts while keeping growth stocks with lower turnover in taxable accounts to benefit from lower capital gains taxes. Even in a low-tax environment like Singapore, understanding things like the tax implications of overseas rental income or investment withdrawals from foreign brokerages is crucial.
Pro-Tip: Plan your withdrawal sequence. The conventional wisdom is often to withdraw from taxable accounts first, then tax-deferred accounts (like a Supplementary Retirement Scheme or SRS account), and finally tax-free accounts. This allows your tax-advantaged money to compound for as long as possible. However, the optimal strategy depends on your specific situation, so mapping this out in advance is a high-value exercise.
5. Inflate-Proof Your Portfolio: Combat the Silent Wealth Killer
The Concept: A portfolio composed entirely of "safe" assets like cash and short-term bonds may feel secure, but it's highly vulnerable to inflation—the silent killer of purchasing power. A 3% inflation rate can cut the value of your money in half in just 24 years. For a retirement that could last 30 years or more, this is a risk you cannot afford to ignore.
The Strategy: You must maintain a healthy allocation to assets that have historically outpaced inflation. This doesn't mean you need to stay in high-risk growth stocks. Instead, focus on quality, dividend-growing companies whose pricing power allows them to pass on rising costs to consumers. Real assets, such as real estate or infrastructure funds, can also provide an excellent inflation hedge. Additionally, consider incorporating inflation-protected bonds (like Singapore's SGS Inflation-Linked Bonds) into the fixed-income portion of your portfolio.
Pro-Tip: Don't de-risk too aggressively. Many pre-retirees make the mistake of fleeing equities entirely. A 40-50% allocation to a globally diversified stock portfolio is often necessary to provide the long-term growth needed to ensure your income keeps pace with the rising cost of living throughout your retirement.
6. Create a 'Bond Ladder': Securing Predictable Cash Flow
The Concept: Instead of just holding a bond fund, a "bond ladder" is a strategy where you own individual bonds with different, staggered maturity dates. For example, you might own bonds that mature in one, two, three, four, and five years. This approach offers several advantages for retirees.
The Strategy: A bond ladder provides a predictable, steady stream of cash flow. Each year, as one "rung" of your ladder matures, you receive your principal back. You can then spend this money or, if you don't need it, reinvest it by buying a new bond at the longest end of your ladder (e.g., a new five-year bond). This structure helps mitigate interest rate risk; if rates rise, you can reinvest your maturing principal at the new, higher rates. If rates fall, the rest of your bonds are still locked in at the old, higher rates.
Pro-Tip: You can build a ladder using high-quality government or corporate bonds. Start small with a 3- to 5-year ladder. For example, with $100,000, you could invest $20,000 each into bonds maturing in 2025, 2026, 2027, 2028, and 2029. You now know you have a predictable $20,000 (plus interest) coming due each year for the next five years.
7. Review and Re-Evaluate Your Insurance Coverage
The Concept: Your insurance needs evolve dramatically as you approach retirement. The life insurance policy you bought to protect your young family and mortgage may no longer be necessary. Conversely, the need for comprehensive health and long-term care insurance becomes paramount, as a single major health event can devastate even the most carefully constructed retirement plan.
The Strategy: This decade is the time for a complete insurance audit. Scrutinize your health insurance policy. Are the coverage limits sufficient for modern healthcare costs? Is your deductible manageable on a retirement income? This is also the time to seriously consider long-term care. In Singapore, this means understanding your CareShield Life coverage and deciding if a supplement is necessary to cover the potential costs of assisted living or a home health aide.
Pro-Tip: Don't cancel an old life insurance policy without careful consideration. Some whole-life policies have a cash value that can be accessed as a source of retirement funds. Schedule a meeting with an independent insurance advisor to get an unbiased review of all your policies, ensuring they align with your new, post-work reality.
8. Establish Your 'Cash Bucket': The Ultimate Market-Proof Buffer
The Concept: One of the biggest risks in retirement is being forced to sell assets during a market downturn to cover living expenses. The "bucket strategy" directly addresses this. The first and most important bucket is a cash reserve holding one to three years' worth of your essential living expenses.
The Strategy: This cash bucket is your ultimate defense. It should be held in ultra-safe, liquid accounts like a high-yield savings account, fixed deposits, or a money market fund. When the market is down, you draw from this cash bucket to pay your bills, giving your stock and bond portfolios time to recover without you having to sell them at a loss. This simple buffer provides incredible financial stability and emotional comfort.
Pro-Tip: During good years in the market, make it a priority to "refill" your cash bucket. If the stock market has a strong run, you can trim some of those gains and use the proceeds to top up your cash reserve back to your 2-year target. This creates a virtuous cycle of selling high to replenish your safety net.
9. Get Serious About Debt Elimination
The Concept: Entering retirement with significant debt is like starting a long-distance swim with an anchor tied to your leg. High-interest debt, like credit card balances or personal loans, will constantly drain your cash flow and force you to take on more risk with your investments just to keep up.
The Strategy: In the 5-10 years before retirement, make eliminating non-mortgage debt your top financial priority. Use either the "debt snowball" (paying off smallest balances first for psychological wins) or "debt avalanche" (paying off highest-interest debt first to save the most money) method. Focus every spare dollar on this goal. Even with a mortgage, analyze the numbers. If your mortgage rate is low, it might make more sense to invest. But if it's high, or if the peace of mind of being mortgage-free is important to you, accelerating payments can be a great move.
Pro-Tip: Once you pay off a debt (like a car loan), don't absorb that old payment amount back into your lifestyle. Immediately redirect that cash flow—$500 a month, for example—directly into your retirement savings account or toward your next debt target. This turbocharges your progress in the final stretch.
10. Define Your 'Why': The Non-Financial Retirement Plan
The Concept: The most common mistake in retirement planning is assuming it's only a financial exercise. A successful retirement is about more than just having enough money; it’s about having a reason to get up in the morning. A retirement without purpose can lead to boredom, and boredom can lead to aimless spending that wrecks even the best-laid financial plans.
The Strategy: In this final decade, spend as much time planning your post-career life as you do your portfolio. What will you do with your newfound 40+ hours per week? Will you travel, volunteer, take up a hobby, start a small consulting business, or spend more time with grandchildren? Having a clear vision for your time provides a social and emotional anchor. It also helps you build a more realistic and fulfilling budget.
Pro-Tip: Sit down with your spouse or partner and create a shared vision. Don't just talk about it—write it down. What does an ideal week in retirement look like? What's on your travel bucket list? This "soft" side of planning gives context to all the hard numbers and makes the financial trade-offs meaningful. It ensures you’re not just retiring from something, but retiring to something wonderful.
Your Final Approach
Navigating the final decade before retirement is about making a series of smart, deliberate shifts. It's about moving from a mindset of aggressive accumulation to one of thoughtful preservation, from focusing on portfolio value to building reliable income streams, and from taking risks to mitigating them.
The ten strategies outlined above form a powerful checklist to guide you on this journey. By systematically de-risking, stress-testing your plan, and aligning your finances with a clear vision for your future, you can transform uncertainty into confidence.
Don’t just read this list—act on it. Pick one or two strategies that resonate most with you and start implementing them this month. The small, consistent actions you take today will ensure your retirement landing is not just safe, but perfect.
If you’d like to build a personalized glide path and stress-test your own retirement plan, my team and I are here to help. Reach out for a consultation, and let's ensure your final decade of work sets you up for a lifetime of security.
About the Author
Goh Ling Yong is a content creator and digital strategist sharing insights across various topics. Connect and follow for more content:
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