6 Replies to “The Mathematics of Retirement Portfolios”

  1. Very helpful article. But financial writers should stop using “pre-retirement income” as an input to the calculations. It has little or nothing to do with actual amounts needed for successful retirement spending, your established spend/budget does.

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  3. Why do most retirement income articles focus on fixed withdrawal rates? This creates a relatively high risk of running out of money unless a very low rate is selected. Would a withdrawal approach based on the IRS Required Minimum Distribution applied against the entire investment portfolio not be a better strategy? It would provide annual increases in withdrawal (adjusted for portfolio gains or losses) and would eliminate the risk of running out of money even if one lives to 100 or beyond.

  4. I believe the assumed starting age is not older than 65. And that funds would start to be withdrawn at that early age. This does not fit my situation, or that of many others.
    My pension lasts for only my lifetime . So how will my wife adjust the withdrawal rate after I am gone? What is the withdrawal plan for shorter retirements, say 10, 15 or 20 years? Is 7% reasonable?

  5. Why not 100% equity after retirement. All the fixed income did was reduce the probability that your funds would last 35 years. Note the trend as you went from 25% equity to 65% equity. 65% equity was much better.

    All the fixed income does is turn off the machine that produces the portfolio growth.


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