Choose wisely. There is only one correct answer to each question.
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1.
Once you have multiplied your withdrawal rate factor by your total investable assets for retirement, let's say you come up with $35,000. This will be the amount you can spend each year of your retirement.
False. Given that you must adjust for inflation each year, the $35,000 would be good for your first year only.
2.
You want to withdraw 6% per year from your portfolio over the next 30 years, which you expect to return 8% per year. Will your portfolio last your lifetime?
Maybe--it depends on the actual returns you experience each year. The actual returns you experience each year in retirement make a huge difference in how much you can spend each year. Averages aren't enough.
3.
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.
4.
How do most retirees cover their expenses?
With a combination of their investments and fixed sources of income. The more fixed sources of income you have, the lower your withdrawal rate can be.
5.
If you aren't satisfied with your withdrawal rate from your portfolio, you can _______.
Any of the above. Any of these options -- or more than one of them -- would help you get more satisfaction.
6.
To find out how long you will be using your retirement portfolio, you need to ______.
Subtract your expected retirement age from your life expectancy. This is the simplest way to do it.
