Choose wisely. There is only one correct answer to each question.
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1.
Once you have multiplied your withdrawal rate factor by your total investable assets for retirement, the resulting number will be _______.
The amount you can spend your first year in retirement. Though the resulting number may look like the amount you can spend each year, you must remember to factor in inflation. Therefore, the number applies only to your first year. Thereafter, you would increase that withdrawal rate by the rate of inflation over the prior year.
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.
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.'
4.
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.
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.
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.