47 lines
1.3 KiB
Python
47 lines
1.3 KiB
Python
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"""Glide-path functions — stock-allocation as a function of years
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since retirement.
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Pfau & Kitces (2014) showed that *rising* equity glide paths
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(starting low and rising) reduce sequence-of-returns risk in the
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critical first decade of retirement. We default to that, with a
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classic static 60/40 also available.
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Each glide returns a fraction in [0, 1] for stock allocation — the
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remainder is bonds.
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"""
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from __future__ import annotations
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from collections.abc import Callable
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GlideFn = Callable[[int], float]
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def rising_equity(start: float = 0.30, end: float = 0.70, ramp_years: int = 15) -> GlideFn:
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"""Linear interpolation from `start` to `end` over `ramp_years`,
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then constant at `end`."""
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span = end - start
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def fn(year: int) -> float:
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if year >= ramp_years:
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return end
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return start + span * (year / ramp_years)
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return fn
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def static(allocation: float) -> GlideFn:
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"""Constant allocation, e.g. 60/40 = static(0.60)."""
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return lambda _year: allocation
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GLIDE_PATHS: dict[str, GlideFn] = {
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"rising": rising_equity(),
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"static_60_40": static(0.60),
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}
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def get(name: str) -> GlideFn:
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if name not in GLIDE_PATHS:
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raise KeyError(f"Unknown glide path: {name!r}. Known: {sorted(GLIDE_PATHS)}")
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return GLIDE_PATHS[name]
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