What Do Market Expectations Have To Do With Safe Withdrawal Rates?
Rather than asking for the probability of success associated with a particular withdrawal rate, we could calculate the highest sustainable withdrawal rate linked to a particular probability of success.
The Advantages Of Monte Carlo Simulations In Retirement Income Planning
One of the classic approaches to studying retirement withdrawal rates is to use Monte Carlo simulations that are parameterized to the same historical data as used in historical simulations.
Does Asset Allocation Affect Withdrawal Rates?
One other important factor from William Bengen’s original study is asset allocation. In particular, he recommended that retirees maintain a stock allocation of 50-75%, writing, “I think it is appropriate to advise the client to accept a stock allocation as close to 75 percent as possible, and in no cases less than 50 percent.”
Sustainable Retirement Spending and Market Returns
What happens to sustainable spending rates as the planning horizon extends, or
if we build in a constraint to preserve wealth and avoid portfolio depletion?
With Retirement Longer Than Ever, What Is the New 4% Rule?
One of the most hotly contested debates in personal finance is over the safe withdrawal rate for retirement. How much can you expect to spend sustainably from your investments during retirement? What do we need to do to be safe?
What Is a Safety-First Retirement Plan?
The safety-first school of thought was originally derived from academic models of how people allocate their resources over a lifetime to maximize lifetime satisfaction.
The 4% Rule And The Search For A Safe Withdrawal Rate
Of the two main schools of thought in retirement income planning, the probability-based school of thought is probably most familiar to the public and financial professionals.
Two Philosophies of Retirement Income Planning
Within the world of retirement income planning, the siloed nature of financial services between investments and insurance leads to two opposing philosophies about how to build a retirement plan.
Understanding the Tools in Your Retirement Income Toolbox
You should be familiar with all of the tools in your retirement income toolbox. Retirement plans can be built to manage varying risks by strategically combining the following retirement income tools in different ways.
Spending Amounts vs Spending Value
How much should you plan to spend each year in retirement? That depends in large part on your budget.
