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Managing Money in Retirement II: Income for a Lifetime
This is the second of a series of posts on retirement withdrawal strategies. If you haven’t read Managing Money in Retirement I, please read it first! Most of us would feel more comfortable having a reliable source of income in retirement — at least enough to cover our essential needs – rather than being completely at the mercy of uncertain investments in stocks, bonds, real estate or more exotic things. As a practical matter, though, how can we go about building the floor of a floor-and-upside strategy? First, let’s define what we’d like in the ideal world. The best source of income would be an inflation-indexed payment, lasting for…
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Managing Money in Retirement I: How Much Can I Withdraw?
Welcome back, and Happy New Year! My first posts covered how much to save for retirement. In the next several posts, I explore how to manage savings and withdrawals once you’re in retirement. OK, so you’ve made the break, attended your last office party, and are no longer punching a clock. How should you handle your savings? How much can you withdraw and spend every year? Wait a minute, you say – didn’t the last couple of blogs already answer that question? Why not withdraw 4% of your savings in the first year, then increase that with inflation each year to keep the purchasing power the same? Well, you would…