Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
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.
2.
What do changing healthcare costs, vacation costs, and other expenses mean for your portfolio's withdrawal rate after you retire?
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.
3.
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.
4.
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.
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.
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.