{"id":324,"date":"2019-01-28T02:43:46","date_gmt":"2019-01-28T02:43:46","guid":{"rendered":"http:\/\/retirementhangout.com\/?p=324"},"modified":"2019-01-28T02:43:52","modified_gmt":"2019-01-28T02:43:52","slug":"managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best","status":"publish","type":"post","link":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/","title":{"rendered":"Managing Money in Retirement IV: A Simple Withdrawal Strategy Works Best"},"content":{"rendered":"\n<p><em>This is the fourth of a series of posts on retirement withdrawal strategies.\u00a0 If you haven\u2019t read <a href=\"https:\/\/retirementhangout.com\/index.php\/2019\/01\/15\/managing-money-in-retirement-how-much-can-i-withdraw\/\">Managing Money in Retirement I<\/a>, <a href=\"https:\/\/retirementhangout.com\/index.php\/2019\/01\/18\/managing-money-in-retirement-ii-income-for-a-lifetime\/\">II<\/a> and <a href=\"https:\/\/retirementhangout.com\/index.php\/2019\/01\/22\/managing-money-in-retirement-iii-one-annuity-you-should-buy\/\">III<\/a>, you may want to read them first.<\/em><\/p>\n\n\n\n<p>In previous posts, we\nreviewed the sustainable withdrawal rate (SWR) and safety first schools of\nretirement planning, one focusing on portfolio withdrawals that will work\nthrough thick and thin, the other on establishing reliable income for essential\nneeds.&nbsp; We worked our way through the\noptions for building a fail-safe source of lifetime income \u2013 perhaps the floor\nof a floor-and-upside retirement strategy.&nbsp;\nDelayed social security and pensions fit the bill, other mechanisms have\ntheir pluses and minuses.&nbsp; Is there a way\nto pull these ideas together and create a strategy that balances safety, a high\nstandard of living and, if desired, a legacy for heirs?&nbsp; <\/p>\n\n\n\n<p><strong>Stanford Study Finds Uncomplicated Strategy is Best<\/strong><\/p>\n\n\n\n<p><a href=\"http:\/\/longevity.stanford.edu\/wp-content\/uploads\/2017\/11\/Optimizing-Retirement-Income-Solutions-November-2017-SCL-Version.pdf\">Recent research<\/a> at the Stanford Longevity Center has identified a surprisingly straightforward strategy, rather prosaically called <em>Spend Safely in Retirement,<\/em> that may work well for most people.\u00a0 Financial planners Steve Vernon, Wade Pfau and Joe Tomlinson examined different retirement income strategies, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Starting Social\nSecurity at 65 and at 70;<\/li><li>Various annuity\ntypes, including single premium immediate annuities (SPIAs), Guaranteed\nLifetime Withdrawal Benefits (GLWBs) and Fixed Index Annuities (FIAs);<\/li><li>Systematic\nwithdrawal plans, including 3%, 5% and 7% withdrawal rates and use of Social\nSecurity\u2019s Required Minimum Distributions (RMDs);<\/li><li>Reverse\nmortgages; and<\/li><li>Combinations of\nthe above.<\/li><\/ul>\n\n\n\n<p>In all, they evaluated how\nwell 292 different retirement income strategies (!) did at providing retirement\nincome, wealth\/accessible assets, ending legacy, and likelihood\/magnitude of\nany shortfalls, using probabilistic modeling of the behavior of stocks, bonds and\ninflation.&nbsp; <\/p>\n\n\n\n<p>Their conclusion?&nbsp; For most middle income people (those with $100k to $1M in savings), the best strategy is a combination of delaying Social Security until age 70 and withdrawing from savings using the IRS\u2019s Required Minimum Distribution tables.&nbsp; <\/p>\n\n\n\n<p style=\"font-size:24px\"><em>the best strategy is\u2026 delaying Social Security until age 70 and withdrawing from savings using the IRS\u2019s Required Minimum Distribution tables<\/em><\/p>\n\n\n\n<p><strong>Defer Social Security Benefits<\/strong><\/p>\n\n\n\n<p>The Stanford study\nreinforces the critical importance of Social Security to retirees and the\nsuperiority of delaying Social Security benefits as compared to other means of\ncreating retirement income, such as annuities.&nbsp;\n(See my previous post.)&nbsp; The study\nauthors also find that deferred Social Security benefits may be a sufficient\nfloor for most people (i.e., adding an annuity on top of delaying Social\nSecurity doesn\u2019t improve the financial outcome).<\/p>\n\n\n\n<p><strong>High Stock Allocations <\/strong><\/p>\n\n\n\n<p>This study found that results were best for portfolios with high stock allocations &#8212; up to 100%!\u00a0 While an all-stock portfolio may be too risky for most retirees \u2013 at least, those without ice in their veins &#8212; this finding underscores the importance of maintaining a substantial stock allocation in retirement.\u00a0 William Bengen, in his <a href=\"http:\/\/www.retailinvestor.org\/pdf\/Bengen1.pdf\">study<\/a> originating the 4% Rule, found that a stock allocation between 50 and 75% struck the best balance between safety and growth, a result largely confirmed by subsequent Sustainable Withdrawal Rate analyses.<\/p>\n\n\n\n<p><strong>Withdrawal Rates \u2013 Let the IRS Decide<\/strong><\/p>\n\n\n\n<p>What about sustainable\nwithdrawals from a retirement portfolio?&nbsp;\nThe study examined 3, 5 and 7% withdrawal rates, and concluded that 3%\nwas best (presumably because there were fewer instances of running out of\nmoney).&nbsp; Of course, your standard of\nliving is also lower at 3%.&nbsp; [Note that\nthis study examined <em>fixed percentage\nwithdrawals<\/em> \u2013 withdrawing the same percentage from a portfolio each year \u2013\nwhich are not the same as the <em>constant\ndollar withdrawals<\/em> studied by Bengen and others.]<\/p>\n\n\n\n<p>Interestingly, the researchers found that making withdrawals according to the IRS RMDs (the amount the IRS requires all IRA\/401(k) holders to withdraw each year once they reach age 70) was the best withdrawal strategy, beating out all the straight percentage strategies.\u00a0 The IRS withdrawal tables specify that 70 year-olds must withdraw at least 3.65% from their IRAs\/401(k)s \u2013 very close to Bengen\u2019s 4%.\u00a0 This is just a coincidence, however; the IRS percentage is not based on any financial analysis but is simply the reciprocal of (joint) life expectancy.\u00a0 If your life expectancy is 28 years, they want you to withdraw 1\/28<sup>th<\/sup> of your IRA savings.<\/p>\n\n\n\n<p>Use of RMDs has some\nadvantages over using the 4% rule as a sustainable withdrawal guideline.&nbsp; First, it is applied to the current savings\namount (rather than derived from savings at the beginning of retirement), which\nhelps to keep withdrawals from getting out of sync with assets.&nbsp; (Withdrawals can, however, vary from year to\nyear, which might be problematic for some.)&nbsp;\n<\/p>\n\n\n\n<p>Second, RMDs go up as you age: at 85, for example, the RMD is 6.76% &#8211; quite a bit higher than the 3.65% required at 70.&nbsp; This allows a realistic but still prudent increase in withdrawals from savings that takes remaining life expectancy into account.&nbsp; Retirees are better able to use their assets during their lifetimes, as it becomes clear they are not going to run out.&nbsp; The required IRS withdrawals for couples within ten years of each other\u2019s ages are shown below.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img fetchpriority=\"high\" decoding=\"async\" width=\"752\" height=\"452\" src=\"https:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/RMD-graph.png\" alt=\"\" class=\"wp-image-328\" srcset=\"https:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/RMD-graph.png 752w, https:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/RMD-graph-300x180.png 300w\" sizes=\"(max-width: 752px) 100vw, 752px\" \/><figcaption>Data from <em><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p590b.pdf\">IRS Publication 590-B:  Distributions from Individual Retirement Arrangements <\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p>Comparing the RMD variable percentage withdrawal strategy with a constant percentage withdrawal strategy is straightforward (just imagine a straight line in the graph above that stays at 4%), and shows that the RMD strategy allows greater withdrawals as you get older.&nbsp; <\/p>\n\n\n\n<p>Comparing RMDs to Bengen\u2019s 4% constant dollar strategy is more difficult, since the percentage withdrawal in that case depends on how the underlying portfolio is doing.\u00a0 However, it is possible to compare the RMD strategy with a Bengen-like withdrawal strategy that is recalculated every year for a shorter timeframe.\u00a0 (Bengen and others typically looked at a 30-year timeframe, assumed to be long enough to cover most retirements.)\u00a0 <\/p>\n\n\n\n<p>Wade Pfau has done this <a href=\"https:\/\/www.marketwatch.com\/story\/time-horizon-vs-the-retirement-4-rule-2013-01-08\">analysis<\/a>, with the result shown below.\u00a0 Interestingly, the SAFEMAX (Bengen\u2019s name for the minimum safe withdrawal percentage) and RMD rates are fairly similar.  (Ignore the very steep right-hand side of the blue SAFEMAX curve; this is an artifact of cutting off the analysis at age 100.)<\/p>\n\n\n\n<figure class=\"wp-block-image is-resized\"><img decoding=\"async\" src=\"https:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/Safemax-vs-RMDs.jpg\" alt=\"\" class=\"wp-image-329\" width=\"634\" height=\"424\" srcset=\"https:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/Safemax-vs-RMDs.jpg 377w, https:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/Safemax-vs-RMDs-300x201.jpg 300w\" sizes=\"(max-width: 634px) 100vw, 634px\" \/><figcaption><a href=\"https:\/\/www.marketwatch.com\/story\/time-horizon-vs-the-retirement-4-rule-2013-01-08\">Source: Wade Pfau, <\/a><em><a href=\"https:\/\/www.marketwatch.com\/story\/time-horizon-vs-the-retirement-4-rule-2013-01-08\">Time horizon vs. the retirement 4% rule<\/a><\/em> <\/figcaption><\/figure>\n\n\n\n<p>One final advantage of the <em>Spend Safely in Retirement<\/em> strategy is that it is almost effortless to implement, since RMDs from retirement accounts are required starting at 70.\u00a0 Many banks and brokerages will calculate and distribute these amounts to their customers automatically.\u00a0 Let them do the work!\u00a0 You can make withdrawals from <em>non<\/em>-retirement accounts using the RMD percentage, or simply use the 4% rule.\u00a0 <\/p>\n\n\n\n<p><strong>The Downside \u2013 Bridging the Gap Until 70<\/strong><\/p>\n\n\n\n<p>Are there any\ndisadvantages to the <em>Spend Safely in\nRetirement Approach<\/em>?&nbsp; Yes \u2013 probably\nthe biggest issue for most people will be how to support themselves until 70\nwithout any Social Security income.&nbsp; If\nyou follow this strategy, you will likely need to draw more than 4% of your\nsavings \u2013 maybe a lot more &#8212; during this period. You may also have high health\ncosts if you retire before age 65 (when Medicare kicks in).&nbsp; A bit of a silver lining is that there may be\na tax benefit to taking more of your IRA\/401(k) savings out earlier and less\nlater, when you\u2019re also taking Social Security.<\/p>\n\n\n\n<p>If you\u2019re contemplating\nthis strategy \u2013 or any approach that involves delaying Social Security \u2013\nthere\u2019s really no alternative to sitting down with a sharp pencil or\nspreadsheet and mapping out your finances in the years up to age 70.&nbsp; Estimate your living costs and how much you\nwill need to withdraw from retirement savings each year.&nbsp; Now &#8212; once you reach 70, do you still have\nsufficient resources to live on the expanded Social Security benefit plus 4% of\nyour remaining savings? &nbsp;<\/p>\n\n\n\n<p>If so, you\u2019re in good\nshape.&nbsp; If not, you may need to consider\nhow to bridge the gap \u2013 work a little longer, get a part-time job, downsize, migrate\nto a cheaper area, move in with the kids\u2026<\/p>\n\n\n\n<p>That\u2019s it \u2013 a retirement\nwithdrawal strategy that\u2019s elegantly simple, easy to implement and makes the\nmost of your hard-earned retirement savings!&nbsp;\n<\/p>\n\n\n\n<p>I hope you\u2019ve found these\nposts helpful in creating your own retirement plan &#8212; one that lets you make\nthe most of your time without worrying too much about money.&nbsp; <\/p>\n\n\n\n<p><strong>References<\/strong><\/p>\n\n\n\n<p><a href=\"http:\/\/www.retailinvestor.org\/pdf\/Bengen1.pdf\">Bengen, William P.&nbsp; (1994, August).&nbsp; Determining Withdrawal Rates Using Historical Data, <\/a><em><a href=\"http:\/\/www.retailinvestor.org\/pdf\/Bengen1.pdf\">Journal of Financial Planning<\/a><\/em><a href=\"http:\/\/www.retailinvestor.org\/pdf\/Bengen1.pdf\">.<\/a><\/p>\n\n\n\n<p><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p590b.pdf\">Department of the Treasury, Internal Revenue Service.&nbsp; (2017). <\/a><em><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p590b.pdf\">Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs).<\/a><\/em><\/p>\n\n\n\n<p><a href=\"https:\/\/www.marketwatch.com\/story\/time-horizon-vs-the-retirement-4-rule-2013-01-08\">Pfau, Wade.&nbsp; (2013, January).&nbsp; Time Horizon vs. the retirement 4% rule.&nbsp; <\/a><em><a href=\"https:\/\/www.marketwatch.com\/story\/time-horizon-vs-the-retirement-4-rule-2013-01-08\">MarketWatch<\/a><\/em><a href=\"https:\/\/www.marketwatch.com\/story\/time-horizon-vs-the-retirement-4-rule-2013-01-08\">.<\/a><\/p>\n\n\n\n<p><a href=\"https:\/\/www.soa.org\/essays-monographs\/2018-securing-future-retirements\/\">Vernon, Steve. (2018). A Smart Way to Develop Retirement Income Strategies.&nbsp; <\/a><em><a href=\"https:\/\/www.soa.org\/essays-monographs\/2018-securing-future-retirements\/\">Securing Future Retirements Essay Collection, Society of Actuaries.<\/a>&nbsp; <\/em>[Short version]<\/p>\n\n\n\n<p><a href=\"http:\/\/longevity.stanford.edu\/wp-content\/uploads\/2017\/11\/Optimizing-Retirement-Income-Solutions-November-2017-SCL-Version.pdf\">Vernon, Steve; Pfau, Wade; and Tomlinson, Joe.&nbsp; (2017, October).&nbsp; Optimizing Retirement Income by Integrating Retirement Plans, IRAs and Home Equity: A framework for evaluating retirement income decisions.&nbsp; Stanford Center on Longevity\/Society of Actuaries<\/a>.&nbsp; [Long version]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is the fourth of a series of posts on retirement withdrawal strategies.\u00a0 If you haven\u2019t read Managing Money in Retirement I, II and III, you may want to read them first. In previous posts, we reviewed the sustainable withdrawal rate (SWR) and safety first schools of retirement planning, one focusing on portfolio withdrawals that will work through thick and thin, the other on establishing reliable income for essential needs.&nbsp; We worked our way through the options for building a fail-safe source of lifetime income \u2013 perhaps the floor of a floor-and-upside retirement strategy.&nbsp; Delayed social security and pensions fit the bill, other mechanisms have their pluses and minuses.&nbsp; Is there a way to pull these ideas together and create a strategy that balances safety, a high standard of living and, if desired, a legacy for heirs?&nbsp; Stanford Study Finds Uncomplicated Strategy is Best Recent research at the Stanford Longevity Center has identified a surprisingly straightforward strategy, rather prosaically called Spend Safely in Retirement, that may work well for most people.\u00a0 Financial planners Steve Vernon, Wade Pfau and Joe Tomlinson examined different retirement income strategies, including: Starting Social Security at 65 and at 70; Various annuity types, including single premium immediate annuities (SPIAs), Guaranteed Lifetime Withdrawal Benefits (GLWBs) and Fixed Index Annuities (FIAs); Systematic withdrawal plans, including 3%, 5% and 7% withdrawal rates and use of Social Security\u2019s Required Minimum Distributions (RMDs); Reverse mortgages; and Combinations of the above. In all, they evaluated how well 292 different retirement income strategies (!) did at providing retirement income, wealth\/accessible assets, ending legacy, and likelihood\/magnitude of any shortfalls, using probabilistic modeling of the behavior of stocks, bonds and inflation.&nbsp; Their conclusion?&nbsp; For most middle income people (those with $100k to $1M in savings), the best strategy is a combination of delaying Social Security until age 70 and withdrawing from savings using the IRS\u2019s Required Minimum Distribution tables.&nbsp; the best strategy is\u2026 delaying Social Security until age 70 and withdrawing from savings using the IRS\u2019s Required Minimum Distribution tables Defer Social Security Benefits The Stanford study reinforces the critical importance of Social Security to retirees and the superiority of delaying Social Security benefits as compared to other means of creating retirement income, such as annuities.&nbsp; (See my previous post.)&nbsp; The study authors also find that deferred Social Security benefits may be a sufficient floor for most people (i.e., adding an annuity on top of delaying Social Security doesn\u2019t improve the financial outcome). High Stock Allocations This study found that results were best for portfolios with high stock allocations &#8212; up to 100%!\u00a0 While an all-stock portfolio may be too risky for most retirees \u2013 at least, those without ice in their veins &#8212; this finding underscores the importance of maintaining a substantial stock allocation in retirement.\u00a0 William Bengen, in his study originating the 4% Rule, found that a stock allocation between 50 and 75% struck the best balance between safety and growth, a result largely confirmed by subsequent Sustainable Withdrawal Rate analyses. Withdrawal Rates \u2013 Let the IRS Decide What about sustainable withdrawals from a retirement portfolio?&nbsp; The study examined 3, 5 and 7% withdrawal rates, and concluded that 3% was best (presumably because there were fewer instances of running out of money).&nbsp; Of course, your standard of living is also lower at 3%.&nbsp; [Note that this study examined fixed percentage withdrawals \u2013 withdrawing the same percentage from a portfolio each year \u2013 which are not the same as the constant dollar withdrawals studied by Bengen and others.] Interestingly, the researchers found that making withdrawals according to the IRS RMDs (the amount the IRS requires all IRA\/401(k) holders to withdraw each year once they reach age 70) was the best withdrawal strategy, beating out all the straight percentage strategies.\u00a0 The IRS withdrawal tables specify that 70 year-olds must withdraw at least 3.65% from their IRAs\/401(k)s \u2013 very close to Bengen\u2019s 4%.\u00a0 This is just a coincidence, however; the IRS percentage is not based on any financial analysis but is simply the reciprocal of (joint) life expectancy.\u00a0 If your life expectancy is 28 years, they want you to withdraw 1\/28th of your IRA savings. Use of RMDs has some advantages over using the 4% rule as a sustainable withdrawal guideline.&nbsp; First, it is applied to the current savings amount (rather than derived from savings at the beginning of retirement), which helps to keep withdrawals from getting out of sync with assets.&nbsp; (Withdrawals can, however, vary from year to year, which might be problematic for some.)&nbsp; Second, RMDs go up as you age: at 85, for example, the RMD is 6.76% &#8211; quite a bit higher than the 3.65% required at 70.&nbsp; This allows a realistic but still prudent increase in withdrawals from savings that takes remaining life expectancy into account.&nbsp; Retirees are better able to use their assets during their lifetimes, as it becomes clear they are not going to run out.&nbsp; The required IRS withdrawals for couples within ten years of each other\u2019s ages are shown below. Comparing the RMD variable percentage withdrawal strategy with a constant percentage withdrawal strategy is straightforward (just imagine a straight line in the graph above that stays at 4%), and shows that the RMD strategy allows greater withdrawals as you get older.&nbsp; Comparing RMDs to Bengen\u2019s 4% constant dollar strategy is more difficult, since the percentage withdrawal in that case depends on how the underlying portfolio is doing.\u00a0 However, it is possible to compare the RMD strategy with a Bengen-like withdrawal strategy that is recalculated every year for a shorter timeframe.\u00a0 (Bengen and others typically looked at a 30-year timeframe, assumed to be long enough to cover most retirements.)\u00a0 Wade Pfau has done this analysis, with the result shown below.\u00a0 Interestingly, the SAFEMAX (Bengen\u2019s name for the minimum safe withdrawal percentage) and RMD rates are fairly similar. (Ignore the very steep right-hand side of the blue SAFEMAX curve; this is an artifact of cutting off the analysis at age 100.) One final advantage of the Spend Safely in Retirement strategy is that it is almost effortless to implement, since RMDs from retirement accounts are required starting at 70.\u00a0 Many banks and brokerages will calculate and distribute these amounts to their customers automatically.\u00a0 Let them do the work!\u00a0 You can make withdrawals from non-retirement accounts using the RMD percentage, or simply use the 4% rule.\u00a0 The Downside \u2013 Bridging the Gap Until 70 Are there any disadvantages to the Spend Safely in Retirement Approach?&nbsp; Yes \u2013 probably the biggest issue for most people will be how to support themselves until 70 without any Social Security income.&nbsp; If you follow this strategy, you will likely need to draw more than 4% of your savings \u2013 maybe a lot more &#8212; during this period. You may also have high health costs if you retire before age 65 (when Medicare kicks in).&nbsp; A bit of a silver lining is that there may be a tax benefit to taking more of your IRA\/401(k) savings out earlier and less later, when you\u2019re also taking Social Security. If you\u2019re contemplating this strategy \u2013 or any approach that involves delaying Social Security \u2013 there\u2019s really no alternative to sitting down with a sharp pencil or spreadsheet and mapping out your finances in the years up to age 70.&nbsp; Estimate your living costs and how much you will need to withdraw from retirement savings each year.&nbsp; Now &#8212; once you reach 70, do you still have sufficient resources to live on the expanded Social Security benefit plus 4% of your remaining savings? &nbsp; If so, you\u2019re in good shape.&nbsp; If not, you may need to consider how to bridge the gap \u2013 work a little longer, get a part-time job, downsize, migrate to a cheaper area, move in with the kids\u2026 That\u2019s it \u2013 a retirement withdrawal strategy that\u2019s elegantly simple, easy to implement and makes the most of your hard-earned retirement savings!&nbsp; I hope you\u2019ve found these posts helpful in creating your own retirement plan &#8212; one that lets you make the most of your time without worrying too much about money.&nbsp; References Bengen, William P.&nbsp; (1994, August).&nbsp; Determining Withdrawal Rates Using Historical Data, Journal of Financial Planning. Department of the Treasury, Internal Revenue Service.&nbsp; (2017). Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs). Pfau, Wade.&nbsp; (2013, January).&nbsp; Time Horizon vs. the retirement 4% rule.&nbsp; MarketWatch. Vernon, Steve. (2018). A Smart Way to Develop Retirement Income Strategies.&nbsp; Securing Future Retirements Essay Collection, Society of Actuaries.&nbsp; [Short version] Vernon, Steve; Pfau, Wade; and Tomlinson, Joe.&nbsp; (2017, October).&nbsp; Optimizing Retirement Income by Integrating Retirement Plans, IRAs and Home Equity: A framework for evaluating retirement income decisions.&nbsp; Stanford Center on Longevity\/Society of Actuaries.&nbsp; [Long version]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-324","post","type-post","status-publish","format-standard","hentry","category-retirement-planning"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Managing Money in Retirement IV: A Simple Withdrawal Strategy Works Best - Retirement Hangout<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Managing Money in Retirement IV: A Simple Withdrawal Strategy Works Best - Retirement Hangout\" \/>\n<meta property=\"og:description\" content=\"This is the fourth of a series of posts on retirement withdrawal strategies.\u00a0 If you haven\u2019t read Managing Money in Retirement I, II and III, you may want to read them first. In previous posts, we reviewed the sustainable withdrawal rate (SWR) and safety first schools of retirement planning, one focusing on portfolio withdrawals that will work through thick and thin, the other on establishing reliable income for essential needs.&nbsp; We worked our way through the options for building a fail-safe source of lifetime income \u2013 perhaps the floor of a floor-and-upside retirement strategy.&nbsp; Delayed social security and pensions fit the bill, other mechanisms have their pluses and minuses.&nbsp; Is there a way to pull these ideas together and create a strategy that balances safety, a high standard of living and, if desired, a legacy for heirs?&nbsp; Stanford Study Finds Uncomplicated Strategy is Best Recent research at the Stanford Longevity Center has identified a surprisingly straightforward strategy, rather prosaically called Spend Safely in Retirement, that may work well for most people.\u00a0 Financial planners Steve Vernon, Wade Pfau and Joe Tomlinson examined different retirement income strategies, including: Starting Social Security at 65 and at 70; Various annuity types, including single premium immediate annuities (SPIAs), Guaranteed Lifetime Withdrawal Benefits (GLWBs) and Fixed Index Annuities (FIAs); Systematic withdrawal plans, including 3%, 5% and 7% withdrawal rates and use of Social Security\u2019s Required Minimum Distributions (RMDs); Reverse mortgages; and Combinations of the above. In all, they evaluated how well 292 different retirement income strategies (!) did at providing retirement income, wealth\/accessible assets, ending legacy, and likelihood\/magnitude of any shortfalls, using probabilistic modeling of the behavior of stocks, bonds and inflation.&nbsp; Their conclusion?&nbsp; For most middle income people (those with $100k to $1M in savings), the best strategy is a combination of delaying Social Security until age 70 and withdrawing from savings using the IRS\u2019s Required Minimum Distribution tables.&nbsp; the best strategy is\u2026 delaying Social Security until age 70 and withdrawing from savings using the IRS\u2019s Required Minimum Distribution tables Defer Social Security Benefits The Stanford study reinforces the critical importance of Social Security to retirees and the superiority of delaying Social Security benefits as compared to other means of creating retirement income, such as annuities.&nbsp; (See my previous post.)&nbsp; The study authors also find that deferred Social Security benefits may be a sufficient floor for most people (i.e., adding an annuity on top of delaying Social Security doesn\u2019t improve the financial outcome). High Stock Allocations This study found that results were best for portfolios with high stock allocations &#8212; up to 100%!\u00a0 While an all-stock portfolio may be too risky for most retirees \u2013 at least, those without ice in their veins &#8212; this finding underscores the importance of maintaining a substantial stock allocation in retirement.\u00a0 William Bengen, in his study originating the 4% Rule, found that a stock allocation between 50 and 75% struck the best balance between safety and growth, a result largely confirmed by subsequent Sustainable Withdrawal Rate analyses. Withdrawal Rates \u2013 Let the IRS Decide What about sustainable withdrawals from a retirement portfolio?&nbsp; The study examined 3, 5 and 7% withdrawal rates, and concluded that 3% was best (presumably because there were fewer instances of running out of money).&nbsp; Of course, your standard of living is also lower at 3%.&nbsp; [Note that this study examined fixed percentage withdrawals \u2013 withdrawing the same percentage from a portfolio each year \u2013 which are not the same as the constant dollar withdrawals studied by Bengen and others.] Interestingly, the researchers found that making withdrawals according to the IRS RMDs (the amount the IRS requires all IRA\/401(k) holders to withdraw each year once they reach age 70) was the best withdrawal strategy, beating out all the straight percentage strategies.\u00a0 The IRS withdrawal tables specify that 70 year-olds must withdraw at least 3.65% from their IRAs\/401(k)s \u2013 very close to Bengen\u2019s 4%.\u00a0 This is just a coincidence, however; the IRS percentage is not based on any financial analysis but is simply the reciprocal of (joint) life expectancy.\u00a0 If your life expectancy is 28 years, they want you to withdraw 1\/28th of your IRA savings. Use of RMDs has some advantages over using the 4% rule as a sustainable withdrawal guideline.&nbsp; First, it is applied to the current savings amount (rather than derived from savings at the beginning of retirement), which helps to keep withdrawals from getting out of sync with assets.&nbsp; (Withdrawals can, however, vary from year to year, which might be problematic for some.)&nbsp; Second, RMDs go up as you age: at 85, for example, the RMD is 6.76% &#8211; quite a bit higher than the 3.65% required at 70.&nbsp; This allows a realistic but still prudent increase in withdrawals from savings that takes remaining life expectancy into account.&nbsp; Retirees are better able to use their assets during their lifetimes, as it becomes clear they are not going to run out.&nbsp; The required IRS withdrawals for couples within ten years of each other\u2019s ages are shown below. Comparing the RMD variable percentage withdrawal strategy with a constant percentage withdrawal strategy is straightforward (just imagine a straight line in the graph above that stays at 4%), and shows that the RMD strategy allows greater withdrawals as you get older.&nbsp; Comparing RMDs to Bengen\u2019s 4% constant dollar strategy is more difficult, since the percentage withdrawal in that case depends on how the underlying portfolio is doing.\u00a0 However, it is possible to compare the RMD strategy with a Bengen-like withdrawal strategy that is recalculated every year for a shorter timeframe.\u00a0 (Bengen and others typically looked at a 30-year timeframe, assumed to be long enough to cover most retirements.)\u00a0 Wade Pfau has done this analysis, with the result shown below.\u00a0 Interestingly, the SAFEMAX (Bengen\u2019s name for the minimum safe withdrawal percentage) and RMD rates are fairly similar. (Ignore the very steep right-hand side of the blue SAFEMAX curve; this is an artifact of cutting off the analysis at age 100.) One final advantage of the Spend Safely in Retirement strategy is that it is almost effortless to implement, since RMDs from retirement accounts are required starting at 70.\u00a0 Many banks and brokerages will calculate and distribute these amounts to their customers automatically.\u00a0 Let them do the work!\u00a0 You can make withdrawals from non-retirement accounts using the RMD percentage, or simply use the 4% rule.\u00a0 The Downside \u2013 Bridging the Gap Until 70 Are there any disadvantages to the Spend Safely in Retirement Approach?&nbsp; Yes \u2013 probably the biggest issue for most people will be how to support themselves until 70 without any Social Security income.&nbsp; If you follow this strategy, you will likely need to draw more than 4% of your savings \u2013 maybe a lot more &#8212; during this period. You may also have high health costs if you retire before age 65 (when Medicare kicks in).&nbsp; A bit of a silver lining is that there may be a tax benefit to taking more of your IRA\/401(k) savings out earlier and less later, when you\u2019re also taking Social Security. If you\u2019re contemplating this strategy \u2013 or any approach that involves delaying Social Security \u2013 there\u2019s really no alternative to sitting down with a sharp pencil or spreadsheet and mapping out your finances in the years up to age 70.&nbsp; Estimate your living costs and how much you will need to withdraw from retirement savings each year.&nbsp; Now &#8212; once you reach 70, do you still have sufficient resources to live on the expanded Social Security benefit plus 4% of your remaining savings? &nbsp; If so, you\u2019re in good shape.&nbsp; If not, you may need to consider how to bridge the gap \u2013 work a little longer, get a part-time job, downsize, migrate to a cheaper area, move in with the kids\u2026 That\u2019s it \u2013 a retirement withdrawal strategy that\u2019s elegantly simple, easy to implement and makes the most of your hard-earned retirement savings!&nbsp; I hope you\u2019ve found these posts helpful in creating your own retirement plan &#8212; one that lets you make the most of your time without worrying too much about money.&nbsp; References Bengen, William P.&nbsp; (1994, August).&nbsp; Determining Withdrawal Rates Using Historical Data, Journal of Financial Planning. Department of the Treasury, Internal Revenue Service.&nbsp; (2017). Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs). Pfau, Wade.&nbsp; (2013, January).&nbsp; Time Horizon vs. the retirement 4% rule.&nbsp; MarketWatch. Vernon, Steve. (2018). A Smart Way to Develop Retirement Income Strategies.&nbsp; Securing Future Retirements Essay Collection, Society of Actuaries.&nbsp; [Short version] Vernon, Steve; Pfau, Wade; and Tomlinson, Joe.&nbsp; (2017, October).&nbsp; Optimizing Retirement Income by Integrating Retirement Plans, IRAs and Home Equity: A framework for evaluating retirement income decisions.&nbsp; Stanford Center on Longevity\/Society of Actuaries.&nbsp; [Long version]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/\" \/>\n<meta property=\"og:site_name\" content=\"Retirement Hangout\" \/>\n<meta property=\"article:published_time\" content=\"2019-01-28T02:43:46+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-01-28T02:43:52+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/RMD-graph.png\" \/>\n<meta name=\"author\" content=\"Hangout Host\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Hangout Host\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/retirementhangout.com\\\/index.php\\\/2019\\\/01\\\/28\\\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/retirementhangout.com\\\/index.php\\\/2019\\\/01\\\/28\\\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\\\/\"},\"author\":{\"name\":\"Hangout Host\",\"@id\":\"https:\\\/\\\/retirementhangout.com\\\/#\\\/schema\\\/person\\\/8c4ae01981f8f32c14283392437fea2a\"},\"headline\":\"Managing Money in Retirement IV: A Simple Withdrawal Strategy Works Best\",\"datePublished\":\"2019-01-28T02:43:46+00:00\",\"dateModified\":\"2019-01-28T02:43:52+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/retirementhangout.com\\\/index.php\\\/2019\\\/01\\\/28\\\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\\\/\"},\"wordCount\":1480,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/retirementhangout.com\\\/#\\\/schema\\\/person\\\/8c4ae01981f8f32c14283392437fea2a\"},\"image\":{\"@id\":\"https:\\\/\\\/retirementhangout.com\\\/index.php\\\/2019\\\/01\\\/28\\\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\\\/#primaryimage\"},\"thumbnailUrl\":\"http:\\\/\\\/retirementhangout.com\\\/wp-content\\\/uploads\\\/2019\\\/01\\\/RMD-graph.png\",\"articleSection\":[\"Retirement planning\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/retirementhangout.com\\\/index.php\\\/2019\\\/01\\\/28\\\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/retirementhangout.com\\\/index.php\\\/2019\\\/01\\\/28\\\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\\\/\",\"url\":\"https:\\\/\\\/retirementhangout.com\\\/index.php\\\/2019\\\/01\\\/28\\\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\\\/\",\"name\":\"Managing Money in Retirement IV: A Simple Withdrawal Strategy Works Best - 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Retirement Hangout","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/","og_locale":"en_US","og_type":"article","og_title":"Managing Money in Retirement IV: A Simple Withdrawal Strategy Works Best - Retirement Hangout","og_description":"This is the fourth of a series of posts on retirement withdrawal strategies.\u00a0 If you haven\u2019t read Managing Money in Retirement I, II and III, you may want to read them first. In previous posts, we reviewed the sustainable withdrawal rate (SWR) and safety first schools of retirement planning, one focusing on portfolio withdrawals that will work through thick and thin, the other on establishing reliable income for essential needs.&nbsp; We worked our way through the options for building a fail-safe source of lifetime income \u2013 perhaps the floor of a floor-and-upside retirement strategy.&nbsp; Delayed social security and pensions fit the bill, other mechanisms have their pluses and minuses.&nbsp; Is there a way to pull these ideas together and create a strategy that balances safety, a high standard of living and, if desired, a legacy for heirs?&nbsp; Stanford Study Finds Uncomplicated Strategy is Best Recent research at the Stanford Longevity Center has identified a surprisingly straightforward strategy, rather prosaically called Spend Safely in Retirement, that may work well for most people.\u00a0 Financial planners Steve Vernon, Wade Pfau and Joe Tomlinson examined different retirement income strategies, including: Starting Social Security at 65 and at 70; Various annuity types, including single premium immediate annuities (SPIAs), Guaranteed Lifetime Withdrawal Benefits (GLWBs) and Fixed Index Annuities (FIAs); Systematic withdrawal plans, including 3%, 5% and 7% withdrawal rates and use of Social Security\u2019s Required Minimum Distributions (RMDs); Reverse mortgages; and Combinations of the above. In all, they evaluated how well 292 different retirement income strategies (!) did at providing retirement income, wealth\/accessible assets, ending legacy, and likelihood\/magnitude of any shortfalls, using probabilistic modeling of the behavior of stocks, bonds and inflation.&nbsp; Their conclusion?&nbsp; For most middle income people (those with $100k to $1M in savings), the best strategy is a combination of delaying Social Security until age 70 and withdrawing from savings using the IRS\u2019s Required Minimum Distribution tables.&nbsp; the best strategy is\u2026 delaying Social Security until age 70 and withdrawing from savings using the IRS\u2019s Required Minimum Distribution tables Defer Social Security Benefits The Stanford study reinforces the critical importance of Social Security to retirees and the superiority of delaying Social Security benefits as compared to other means of creating retirement income, such as annuities.&nbsp; (See my previous post.)&nbsp; The study authors also find that deferred Social Security benefits may be a sufficient floor for most people (i.e., adding an annuity on top of delaying Social Security doesn\u2019t improve the financial outcome). High Stock Allocations This study found that results were best for portfolios with high stock allocations &#8212; up to 100%!\u00a0 While an all-stock portfolio may be too risky for most retirees \u2013 at least, those without ice in their veins &#8212; this finding underscores the importance of maintaining a substantial stock allocation in retirement.\u00a0 William Bengen, in his study originating the 4% Rule, found that a stock allocation between 50 and 75% struck the best balance between safety and growth, a result largely confirmed by subsequent Sustainable Withdrawal Rate analyses. Withdrawal Rates \u2013 Let the IRS Decide What about sustainable withdrawals from a retirement portfolio?&nbsp; The study examined 3, 5 and 7% withdrawal rates, and concluded that 3% was best (presumably because there were fewer instances of running out of money).&nbsp; Of course, your standard of living is also lower at 3%.&nbsp; [Note that this study examined fixed percentage withdrawals \u2013 withdrawing the same percentage from a portfolio each year \u2013 which are not the same as the constant dollar withdrawals studied by Bengen and others.] Interestingly, the researchers found that making withdrawals according to the IRS RMDs (the amount the IRS requires all IRA\/401(k) holders to withdraw each year once they reach age 70) was the best withdrawal strategy, beating out all the straight percentage strategies.\u00a0 The IRS withdrawal tables specify that 70 year-olds must withdraw at least 3.65% from their IRAs\/401(k)s \u2013 very close to Bengen\u2019s 4%.\u00a0 This is just a coincidence, however; the IRS percentage is not based on any financial analysis but is simply the reciprocal of (joint) life expectancy.\u00a0 If your life expectancy is 28 years, they want you to withdraw 1\/28th of your IRA savings. Use of RMDs has some advantages over using the 4% rule as a sustainable withdrawal guideline.&nbsp; First, it is applied to the current savings amount (rather than derived from savings at the beginning of retirement), which helps to keep withdrawals from getting out of sync with assets.&nbsp; (Withdrawals can, however, vary from year to year, which might be problematic for some.)&nbsp; Second, RMDs go up as you age: at 85, for example, the RMD is 6.76% &#8211; quite a bit higher than the 3.65% required at 70.&nbsp; This allows a realistic but still prudent increase in withdrawals from savings that takes remaining life expectancy into account.&nbsp; Retirees are better able to use their assets during their lifetimes, as it becomes clear they are not going to run out.&nbsp; The required IRS withdrawals for couples within ten years of each other\u2019s ages are shown below. Comparing the RMD variable percentage withdrawal strategy with a constant percentage withdrawal strategy is straightforward (just imagine a straight line in the graph above that stays at 4%), and shows that the RMD strategy allows greater withdrawals as you get older.&nbsp; Comparing RMDs to Bengen\u2019s 4% constant dollar strategy is more difficult, since the percentage withdrawal in that case depends on how the underlying portfolio is doing.\u00a0 However, it is possible to compare the RMD strategy with a Bengen-like withdrawal strategy that is recalculated every year for a shorter timeframe.\u00a0 (Bengen and others typically looked at a 30-year timeframe, assumed to be long enough to cover most retirements.)\u00a0 Wade Pfau has done this analysis, with the result shown below.\u00a0 Interestingly, the SAFEMAX (Bengen\u2019s name for the minimum safe withdrawal percentage) and RMD rates are fairly similar. (Ignore the very steep right-hand side of the blue SAFEMAX curve; this is an artifact of cutting off the analysis at age 100.) One final advantage of the Spend Safely in Retirement strategy is that it is almost effortless to implement, since RMDs from retirement accounts are required starting at 70.\u00a0 Many banks and brokerages will calculate and distribute these amounts to their customers automatically.\u00a0 Let them do the work!\u00a0 You can make withdrawals from non-retirement accounts using the RMD percentage, or simply use the 4% rule.\u00a0 The Downside \u2013 Bridging the Gap Until 70 Are there any disadvantages to the Spend Safely in Retirement Approach?&nbsp; Yes \u2013 probably the biggest issue for most people will be how to support themselves until 70 without any Social Security income.&nbsp; If you follow this strategy, you will likely need to draw more than 4% of your savings \u2013 maybe a lot more &#8212; during this period. You may also have high health costs if you retire before age 65 (when Medicare kicks in).&nbsp; A bit of a silver lining is that there may be a tax benefit to taking more of your IRA\/401(k) savings out earlier and less later, when you\u2019re also taking Social Security. If you\u2019re contemplating this strategy \u2013 or any approach that involves delaying Social Security \u2013 there\u2019s really no alternative to sitting down with a sharp pencil or spreadsheet and mapping out your finances in the years up to age 70.&nbsp; Estimate your living costs and how much you will need to withdraw from retirement savings each year.&nbsp; Now &#8212; once you reach 70, do you still have sufficient resources to live on the expanded Social Security benefit plus 4% of your remaining savings? &nbsp; If so, you\u2019re in good shape.&nbsp; If not, you may need to consider how to bridge the gap \u2013 work a little longer, get a part-time job, downsize, migrate to a cheaper area, move in with the kids\u2026 That\u2019s it \u2013 a retirement withdrawal strategy that\u2019s elegantly simple, easy to implement and makes the most of your hard-earned retirement savings!&nbsp; I hope you\u2019ve found these posts helpful in creating your own retirement plan &#8212; one that lets you make the most of your time without worrying too much about money.&nbsp; References Bengen, William P.&nbsp; (1994, August).&nbsp; Determining Withdrawal Rates Using Historical Data, Journal of Financial Planning. Department of the Treasury, Internal Revenue Service.&nbsp; (2017). Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs). Pfau, Wade.&nbsp; (2013, January).&nbsp; Time Horizon vs. the retirement 4% rule.&nbsp; MarketWatch. Vernon, Steve. (2018). A Smart Way to Develop Retirement Income Strategies.&nbsp; Securing Future Retirements Essay Collection, Society of Actuaries.&nbsp; [Short version] Vernon, Steve; Pfau, Wade; and Tomlinson, Joe.&nbsp; (2017, October).&nbsp; Optimizing Retirement Income by Integrating Retirement Plans, IRAs and Home Equity: A framework for evaluating retirement income decisions.&nbsp; Stanford Center on Longevity\/Society of Actuaries.&nbsp; [Long version]","og_url":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/","og_site_name":"Retirement Hangout","article_published_time":"2019-01-28T02:43:46+00:00","article_modified_time":"2019-01-28T02:43:52+00:00","og_image":[{"url":"http:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/RMD-graph.png","type":"","width":"","height":""}],"author":"Hangout Host","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Hangout Host","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/#article","isPartOf":{"@id":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/"},"author":{"name":"Hangout Host","@id":"https:\/\/retirementhangout.com\/#\/schema\/person\/8c4ae01981f8f32c14283392437fea2a"},"headline":"Managing Money in Retirement IV: A Simple Withdrawal Strategy Works Best","datePublished":"2019-01-28T02:43:46+00:00","dateModified":"2019-01-28T02:43:52+00:00","mainEntityOfPage":{"@id":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/"},"wordCount":1480,"commentCount":0,"publisher":{"@id":"https:\/\/retirementhangout.com\/#\/schema\/person\/8c4ae01981f8f32c14283392437fea2a"},"image":{"@id":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/#primaryimage"},"thumbnailUrl":"http:\/\/retirementhangout.com\/wp-content\/uploads\/2019\/01\/RMD-graph.png","articleSection":["Retirement planning"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/","url":"https:\/\/retirementhangout.com\/index.php\/2019\/01\/28\/managing-money-in-retirement-iv-a-simple-withdrawal-strategy-works-best\/","name":"Managing Money in Retirement IV: A Simple Withdrawal Strategy Works Best - 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