Your Finance: Retirement withdrawals
For many years, retirement experts have advised retirees they should have enough savings to last them for 30 years. But many people are retiring at 62 or younger, and living into their 90s, so that plan isn't always enough. Credit: iStock
After a lifetime of diligently saving, retirees are faced with a new question: How much can they take out during retirement?
For many years, retirement experts have been helping retirees meet that challenge by telling them that 4 percent is a safe withdrawal rate. The theory, supported with lots of backtesting, holds that if you keep your portfolio diversified and start your retirement with a 4 percent withdrawal, you can increase your withdrawal by the inflation rate every year and be almost certain your money will last for 30 years.
But many people are retiring at 62 or younger, and living into their 90s, so 30 years isn't always enough. Even more significantly, the market meltdown of 2008-2009 drove home the weakness of the 4 percent rule. When stocks and bonds deliver poor returns, even 4 percent isn't safe enough.
So, how can you live well enough without risking your future? Here are some pointers.
What you missed this week on NewsdayTV NewsdayTV takes a look back at some of our investigations and exclusive stories from this week.
What you missed this week on NewsdayTV NewsdayTV takes a look back at some of our investigations and exclusive stories from this week.
