Course 310: How to Withdraw from Your Portfolio in Retirement
Estimating How Much of Your Portfolio You Can Spend
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

You now know what percentage of your portfolio you can spend in retirement. Next you need to determine what that means in dollar terms.

To do that, tally the value of your retirement portfolio. Include all taxable account balances, as well as money in your tax-deferred accounts, such as IRAs and 401(k)s.

Fill in those figures on the worksheet.

Next, multiply your withdrawal rate factor by your total investable assets. The result is how much of your portfolio you can spend your first year in retirement.

Let's take an example. Say you have $500,000 in total investable assets, a 20-year time horizon, a mix of 50% stocks, 35% bonds, 15% cash, and an 85% confidence level. You'd multiply approximately 6% by $500,000. That would equal a pretax withdrawal rate of about $30,000 per year. Each year, you'd increase that withdrawal rate by the rate of inflation over the prior year.

Next: Other Sources of Income--and Taxes >>


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