Re-examining "To versus Through"

"To versus Through” is a long-standing debate in the target date fund industry, describing whether a glidepath should de-risk only until the retirement date (“to” glidepath) or continues to reduce the risk level beyond the retirement date (“through” glidepath).

Whatever the merits of either approach, “to versus through” should be understood as expressing different philosophies about how assets should be invested after a participant ceases to earn a paycheck.

It is BlackRock’s position that a persuasive common sense case can be made for the “to” glidepath approach based on an understanding of human capital, or the ability to earn income, which is depleted at retirement; and retirement risk, which we argue is at its highest level the day retirement begins. In addition, this paper also explores the question through the lens of BlackRock research. The research is built on a substantial body of academic work and creates a unified framework for exploring a wide range of lifecycle investing questions.