Retirement Income: Repairing the Damage to Assure the Flow
by Christine S. Fahlund
Having suffered severe losses in their retirement nest eggs last year, many retirees living off of their savings are reviewing their investment and spending plans, searching for new plans of action to ensure their savings can sustain them throughout their lifetime.
There is no question that bear markets can be devastating—particularly for new retirees—if action is not taken to compensate for the loss. The sooner you adjust, the better.
In this article
- Assessing the Damage
- Repairing the Damage
- Running Out of Money
- Banking on History
- Fleeing to Fixed Income
- Getting Back to 90%
- No Predicting
Share this article
Facebook
Twitter
E-mail
SeekingAlpha
Stumbleupon
Delicious
LinkedIn
But what is your best course of action?
While the instinct may be to flee the risk of equity markets, postpone retirement or go back to work, an alternative strategy would be to consider temporarily reducing annual withdrawals from your nest egg.
A new T. Rowe Price retirement income study compared various withdrawal adjustment strategies for new retirees who suffered a 30% decline in their portfolios in their first year of retirement, under two different assumptions of future stock market performance, and compared to a switch to a 100% bond portfolio.
To read more, please become an AAII Registered User or CLICK HERE.
Discussion
Dr. Fahlund:
For the life of me , I cannot understand why this study was done with a million dollar portfolio when the greater number of Americans retire with less than 200,000.
Why can't your planners be more realistic with your assumptions to help the less fortunate? We are the greater majority!!!
Regards,
posted over 2 years ago by Roland from New Jersey
