Determining the sustainable spending rate from a diversified investment portfolio in retirement requires making decisions about longevity and market returns. The final section in this chapter provides an opportunity to integrate this discussion in order to obtain a better sense about sustainable distributions from an investment portfolio in retirement. Rather than blindly applying something like […]
Just like many other areas of life, the novel Coronavirus is having a significant impact on the financial markets.
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. There is an old saying that if the only tool you have is a hammer, then everything starts to look like a nail. This tendency is […]
The IRS encourages charitable giving by classifying donations to qualified charities as tax-deductible. As a result, it’s possible to “do good, while doing well.”
Distinguishing between “safe” withdrawal rates and “optimal” withdrawal rates is an essential piece of the retirement spending conversation.
There has been too much emphasis on the portfolio and spending conservatively to keep failure rates low. This is not the whole story for retirement income. Certain circumstances, which we will explore, may allow retirees to accept a higher probability of “failure,” and spend more aggressively from their investment portfolio.
A TIPS ladder can be constructed similarly to a Treasury strips ladder, learn how it’s done here.
Building bond ladders for retirement income is an important but understudied topic.
Thus far, we have looked at applying a 4% initial withdrawal rate to the different retirement spending strategies. In such cases, we did not use an XYZ rule to calibrate the level of downside risk as the initial spending rate was always the same.
Deciding on the right retirement spending strategy for your particular situation is both incredibly difficult, and incredibly important. There are huge numbers of reasonable options, but how do you know which is right for you? The answer depends on several factors.