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- Title
Retirement withdrawals: an analysis of the benefits of periodic "midcourse" adjustments.
- Authors
Spitzer, John J.
- Abstract
Much research has addressed the question of how much money can safely be withdrawn from a retirement portfolio without prematurely running out of money (shortfall risk). Instead of constant (inflation adjusted) annual withdrawals, this study uses withdrawal amounts (and optionally, asset allocations) that are modified every five years over a 30-year withdrawal horizon. A bootstrap is used initially to obtain the conditional probability rules. Further simulations demonstrate that periodic (every five years) adjustments can decrease the risk of running out of money as well as increase the amount withdrawn, as compared to a "constant withdrawal amount" strategy.
- Subjects
RETIREMENT; ASSET allocation; PORTFOLIO management (Investments); INVESTMENT policy; PERSONAL finance; FINANCIAL research
- Publication
Financial Services Review, 2008, Vol 17, Issue 1, p17
- ISSN
1057-0810
- Publication type
Article