Bogleheads® Live Christine Benz: How much can I spend in retirement?
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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!
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Fixed Real Withdrawal System
- Consider a fixed real withdrawal system, taking out a percentage in year one and adjusting for inflation.
- Start with a 3.8% withdrawal rate for a 30-year horizon with a balanced portfolio.
Irregular Historical Returns
- Even a 3.8% withdrawal rate is lower than historical suggestions, potentially indicating unusual past market returns.
- Future returns may not match the past, so lower withdrawal rates are advisable.
Forward-Looking Approach
- Unlike Bill Bengen's historical approach, this research uses forward-looking capital market assumptions.
- Current valuations and bond yields are crucial for realistic withdrawal rates.