Your Retirement Number Is Meaningless
Retirement is this big unknown for so many folks, that when someone offers to nail it down to a concrete number, of course people will line up. The only problem is, it’s meaningless.
How Much Wealth Will You Have 30 Years Into Retirement?
Thus far, we have compared the historical performance of various spending strategies when the initial spending rate is 4%. Over the next couple weeks, we will apply an XYZ rule and consider how spending may be impacted by the low-interest-rate environment facing retirees.
5 Ways You’re Sabotaging Your Retirement
It seems that no matter how much information is out there, people are still hitting retirement with little or no preparedness at all. Here are 5 of the most common ways people are sabotaging their retirement.
How Can Retirees Adjust Their Spending For Inflation Without Breaking The Bank?
A final example in the decision rules category is the Target Percentage Adjustment method introduced by David Zolt in his 2013 Journal of Financial Planning article, “Achieving a Higher Safe Withdrawal Rate with the Target Percentage Adjustment.”
The Original Retirement Spending Decision Rules
The next decision rule approach provides the name for this category of methods. The Guyton and Klinger spending decision rules derive from work by Jonathan Guyton in 2004 and the team of Jonathan Guyton and William Klinger in 2006.
Finding the Right Balance Between Inflation Risk and Investment Risk
When we talk about retirement risks, people often tend to fixate on their investments. Yes, investment risk is important, but it’s only a piece of the puzzle. The primary risk to your retirement is not having enough money to do what you want. Like I said, investment risk certainly plays into this, but you need […]
The Perks Of Being A Flexible Spender In Retirement
William Bengen’s 1994 article introduced the concept of the 4% rule for retirement withdrawals. He defined the sustainable spending rate as the percentage of retirement date assets which can be withdrawn, with this amount adjusted for inflation in subsequent years, such that the retirement portfolio is not depleted for at least thirty years.
Which Are You More Worried About: Running Out Of Money While You’re Alive Or Dying?
As David Blanchett says: failure is really only failure if wealth is depleted while you are still alive, not just over an arbitrarily long time period.
How Much You Should Spend In Retirement Depends On How Long You Think You’ll Live
In regards to my last column, I find it helps to visualize the data, and Exhibit 1 shows the specific spending rates for a variety of asset allocations and retirement lengths. It also shows the withdrawal rates implied by the required minimum distribution (RMD) rates set by the IRS for tax-deferred retirement accounts.
Should You Plan On Your Retirement Lasting 30 Years Or 40?
The 4% rule has a planning horizon of thirty years. But is that a long enough horizon?
