Choose wisely. There is only one correct answer to each question.
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1.
If you expect your portfolio to return X% per year between now and retirement, and you decide to withdraw less than X%, you might run out of money before retirement.
True. You actually might if there is a bear market at certain points in your time horizon. That's why actual returns are what matter, rather than expected averages.
2.
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.
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.
If you aren't satisfied with your withdrawal rate from your portfolio, what can you do?
Accept a lower confidence level. You can also put off retirement or adjust your asset mix to possibly increase your withdrawal rate.
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.
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.'
