Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
What will likely happen to your spending rate during your retirement years?
It will likely change. Spending needs change in retirement, especially for healthcare. And some spending will likely drop -- on clothes, for example.
3.
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.
4.
Your retirement time horizon will be how long your portfolio lasts before running out.
False. Your retirement time horizon will be how long you expect to draw on your portfolio, not how long it actually lasts.
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.
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.
