Course 310: How to Withdraw from Your Portfolio in Retirement
Find Your Withdrawal Rate
In this course
1 Introduction
2 Find Your Asset Mix, Time Horizon
3 Determine How Confident You Want to Be
4 Find Your Withdrawal Rate
5 Estimating How Much of Your Portfolio You Can Spend
6 Other Sources of Income--and Taxes
7 Making Refinements

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:

  1. 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.
  2. 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.

Next: Estimating How Much of Your Portfolio You Can Spend >>

Print Lesson |Feedback | Digg! digg it
Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.
Copyright 2015 Morningstar, Inc. All rights reserved. Please read our Privacy Policy.
If you have questions or comments please contact Morningstar.