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Bogleheads® Live
Christine Benz: How much can I spend in retirement?
Jan 23, 2023
Christine Benz, an expert in retirement spending strategies, joins to tackle the question of how much retirees can safely withdraw. She discusses updated withdrawal rates, revealing a shift to 3.8% due to market conditions. The conversation dives into the significance of flexible planning and how changing market dynamics impact retirement portfolios. Benz emphasizes the need to rethink investment strategies and suggests seeking professional guidance to navigate the complexities of retirement finances. Prepare to reconsider your financial strategy!
34:07
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Quick takeaways
- Retirees can now expect a 3.8% safe withdrawal rate due to improved market conditions, enhancing financial security compared to previous years.
- A balanced portfolio with a mix of stocks and bonds allows for higher sustainable withdrawals, emphasizing the importance of asset allocation in retirement planning.
Deep dives
Updated Safe Withdrawal Rates for Retirees
Recent research indicates that retirees can expect a 3.8% safe withdrawal rate, an increase from the previous 3.3% figure. This adjustment is based on current market conditions, including lower equity valuations and higher bond yields, which have improved the prospects for retirees starting in late 2022 or early 2023. The analysis adopts a forward-looking approach, using Monte Carlo simulations to evaluate sustainable withdrawal rates rather than historical data. This enhancement in the withdrawal rate suggests that those planning for retirement can have a slightly more comfortable financial outlook compared to previous years.
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Discover
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Listen to the best highlights from the podcasts you love and dive into the full episode