Choose wisely. There is only one correct answer to each question.
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1.
If you aren't satisfied with your withdrawal rate from your portfolio, you may need to put off retirement.
True. Though there are other options besides that, putting off retirement might be necessary.
2.
In terms of portfolio withdrawal, what does a 50% confidence level mean?
There's a 50% chance that your portfolio will expire before you do. For some, a 95% or 100% confidence level is crucial: You want your withdrawal rate to survive most worst-case scenarios. Others may accept a lower probability of success.
3.
To add up the value of your retirement portfolio so that you can determine how much to spend each year, you should include _______.
All taxable and tax-deferred accounts. You should ideally include all from both types, since this is when you will be using up your money.
4.
Your retirement time horizon will be _______.
How long you expect to draw on your portfolio. This usually means how long you expect to live once retired. They key word with time horizons is 'expect.'
5.
Examples of fixed sources of income that you might be able to include in your retirement withdrawals are _______.
All of the above. These are all fixed sources, although some are adjusted for inflation.
6.
Which statement is true?
Your spending rates in retirement will likely change over time. Your spending rates may rise or fall. That's why you'll need to monitor and adjust your spending amounts throughout your retirement.
