Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
If you aren't satisfied with your withdrawal rate from your portfolio, what can you do?
Accept a lower confidence level. You can also put off retirement or adjust your asset mix to possibly increase your withdrawal rate.
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.
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.
5.
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.
6.
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.