Find Your Withdrawal Rate
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Find Your Withdrawal Rate
When calculating withdrawals from your retirement portfolio, you must find your withdrawal rate.
Things To Know
- If you aren’t satisfied with the rate you’re getting, consider altering your asset mix.
On the income worksheet, find where all three lines—your target asset mix, number of years expected in retirement, and level of confidence—intersect. This is your withdrawal rate given those parameters.
Two things to consider:
- If your estimated or remaining years in retirement fall between two numbers, you’ll need to estimate a mid-way point for your withdrawal rate. For example, if you expect to spend 25 years in retirement, you’ll need to estimate a withdrawal rate that is halfway between 20 and 30 years.
- If you aren’t satisfied with the rate you’re getting, consider altering your asset mix. Or experiment with other confidence levels. Or put off retirement (thereby shortening the number of years expected in retirement) so that you can accumulate more assets. Finding the best withdrawal rate for you is about trade-offs.