The 4% Rule
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.
Read MoreImproving Retirement Income Efficiency Using Reverse Mortgages
Maintaining higher fixed costs in retirement increases exposure to sequence risk by requiring a higher withdrawal rate from remaining assets. Drawing from a reverse mortgage has the potential to mitigate this aspect of sequence risk by reducing the need for portfolio withdrawals at inopportune times.
Read MoreMaking Sense Out of Variable Spending Strategies for Retirees
Variable spending strategies fall between two extremes: spending a set amount without regard for portfolio balance, and spending a fixed percentage of the balance.
Read MoreSafe 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.
Read MoreSequence Risk vs. Investment Risk
A lot has already been written about the sequence of returns risk confronting retirees. But the full implications of sequence risk have not been completely internalized. Retirees become more vulnerable to investment volatility, because as they withdraw from their portfolio they may find themselves locking in investment losses. It’s the opposite effect from dollar cost averaging.
Read MoreTo Rise or Not To Rise: Stock Allocation During Retirement
Both the February and March 2015 issues of the Journal of Financial Planning include articles which address and extend the work on rising equity glidepaths during retirement, which Michael Kitces and I published in the January 2014 issue. Admittedly, the March one is also by us, and I’ll get to that it an moment, but…
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