Comments on: What’s in a Number? Choosing a Withdrawal Rate for Your Retirement Assets

By: Carnival of Pecuniary Delights #22 – UFC Edition | The Canadian Finance Blog

Thu, 03 Sep 2009 09:09:28 +0000

[...] Jeff Rose from Good Financial Cents presents How Much Can You Safely Withdraw in Retirement. [...]

By: No Retirement Plan and I’m 48 Years Old

No Retirement Plan and I’m 48 Years Old — Mon, 06 Jul 2009 05:07:49 +0000

[...] you would be investing $5,500 a month at that time. It is therefore not out of reason to expect a retirement nest egg in the neighborhood of $1,000,00 by age [...]

By: Four Pillars

Four Pillars — Mon, 29 Jun 2009 02:59:06 +0000

Nice post and great pics!
Four Pillars´s last blog ..Welcome Globe and Mail Readers

By: Boomers & Seniors Blog Carnival: Retirement Cash, Memory Loss Prevention, Caregiver Stress, More | Seniors For Living

Tue, 23 Jun 2009 18:02:58 +0000

[...] If you’ve got another minute to think about your financial future today, Jeff Rose has one more important post to share: What’s in a Number? Choosing a Withdrawal Rate for Your Retirement Assets. [...]

By: Economy and your Finances Carnival- June 21, 2009 | OneMint

Economy and your Finances Carnival- June 21, 2009 | OneMint — Sun, 21 Jun 2009 08:03:38 +0000

[...] Rose presents What’s in a Number? Choosing a Withdrawal Rate for Your Retirement Assets posted at Jeff [...]

By: Saturday Staples: Personal Finance Reading : Yielding Wealth - Personal Finance Tips - Money Management Advice

Sat, 20 Jun 2009 14:14:14 +0000

[...] Choosing a Withdrawal Rate for Your Retirement Assets at Good Financial Cents. [...]

By: dawn

dawn — Wed, 17 Jun 2009 19:37:52 +0000

5.8%…wow…all i can say is, this sure is a far cry from the magic number frequently touted 10 years ago, based on ibbotson numbers from 1926 to whatever the current year was. I think it was in the range of 10%.

By: Todd Tresidder

Todd Tresidder — Wed, 17 Jun 2009 06:05:45 +0000

Jeff,
The rate of withdrawal is remarkably consistent across long-term studies because it is actually a function of the long-term return of the assets minus inflation. This is intuitively obvious – the real return of the assets roughly equals the safe withdrawal rate. The exact time period studied, specific asset allocation, and volatility of returns then determines what the real return and consquently the safe withdrawal rate will be.

The concern then becomes whether or not the real return from the past is indicative of real returns in the future? That is up to serious debate. Given the economic factors that correlate with growth in real return, the economic factors that correlate to inflation, and the fundamentals that we see currently in the economy I would be very concerned about projecting past safe withdrawal rates going forward. It could be very dangerous.

I encourage an entirely different approach to “withdrawal rates” that avoids the dangers of drawing down a portfolio and it’s dependency on asset growth rates by focusing on the cash flow that the portfolio produces instead.

Hope that helps. Todd
Todd Tresidder´s last blog ..Savoring Summer