On the worksheet, find where all three lines--your target asset mix, number of years expected in retirement, and level of confidence--intersect. This is your withdrawal rate given those parameters.
Two things to consider:
- If your estimated or remaining years in retirement falls between two numbers, you'll need to estimate a mid-way point for your withdrawal rate. For example, if you expect to spend 25 years in retirement, you'll need to estimate a withdrawal rate that is half way between 20 and 30 years.
- If you aren't satisfied with the rate you're getting, consider altering your asset mix. Or experiment with other confidence levels. Or put off retirement (thereby shortening the number of years expected in retirement) so that you can accumulate more assets. Finding the best withdrawal rate for you is about trade-offs.
Estimating How Much of Your Portfolio You Can Spend >>