Seeking A Fixed Percentage Approach To Retirement Spending
The fixed percentage withdrawal strategy is the polar opposite of constant inflation-adjusted spending. Subsequent strategies we consider will strive to strike a balance between these two. This fixed percentage strategy calls for retirees to spend a constant percentage of the remaining portfolio balance in each year of retirement.
Retirement Income Planning Is As Easy As PAY
As an alternative to failure rates, I suggest calibrating the downside risk across strategies in order to match them for a level of risk the retiree is comfortable taking. This calibration is done with a customized “XYZ formula” that I first outlined in my article, “Making Sense Out of Variable Strategies for Retirees” in the Journal of Financial Planning.
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.”
How Should I Spend My Money in Retirement?
The whole point of saving your money is to be able to use it in the future. You’ve spent decades saving for retirement, so you want to use the money in the most effective way possible.
Safe Withdrawal Rates for Retirement and the Trinity Study
One of the classic studies in the field of financial and retirement planning is the Trinity Study.
Ten Reasons Why the 4% Rule is Too Simplistic for Retirement Planning
What is the highest withdrawal amount as a percentage of retirement date assets that with inflation adjustments will be sustainable for the full 30 years? Here are 10 reasons that 4% may not be the appropriate withdrawal rate for every new retiree.
The Shocking International Experience of the 4% Rule
The Shocking International Experience of the 4% Rule. An argument made in support of the 4% rule is that despite what I argued before, post-1926 U.S…
Spending Amounts vs Spending Value
How much should you plan to spend each year in retirement? That depends in large part on your budget.
Fixed Time Horizons vs. Survival Probabilities for Retirement Planning
The planning horizon for the 4% rule is 30 years, but how long will your retirement really last?
Safe Withdrawal Rates and Life Expectancy, Part 2
Safe Withdrawal Rates and Life Expectancy, Part 2
