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Portfolios 310: How to Withdraw from Your Portfolio in Retirement

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1.
If you aren't satisfied with your withdrawal rate from your portfolio, you may need to put off retirement.
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True. Though there are other options besides that, putting off retirement might be necessary.
2.
To add up the value of your retirement portfolio so that you can determine how much to spend each year, you should include _______.
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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.
3.
In terms of portfolio withdrawal, what does a 50% confidence level mean?
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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.
4.
Many retirees have sources of income that are fixed, such as Social Security or pensions. How does inflation affect their purchasing power?
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It depends on the source. Many sources of fixed income lose their purchasing power due to inflation. But some of them get adjusted annually for the rate of inflation, thus keeping abreast of it.
5.
What do changing healthcare costs, vacation costs, and other expenses mean for your portfolio's withdrawal rate after you retire?
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You will likely need to adjust it. Some expenses will drop, while others will rise. While one cannot say with certainty, this is the probable outcome.
6.
Your retirement time horizon will be _______.
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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.'