Find out how much of your portfolio you will be able to spend in retirement. Joe and Al take you through three different ages and what people at those ages can spend in retirement based on retirement assets, distribution rate and retirement fixed income.


“What percentage should you be pulling from your overall portfolio?
This is called a sustainable distribution rate. This helps you identify how much you should be pulling from your portfolio. We’ve got three scenarios, retiring at 55, 65 and 75 starting with $500,000 in each case. A 55-year old should probably not distribute more than about 3.3 percent meaning that 3.3 percent of $500,000 is about all they can withdraw, which is about $16,500. A 75-year old has less longevity since they’re older so they’ll probably want to pull out around 5.3 percent. Look what happens to the 55-year old; let’s say they have a pension of about $30,000 – they can only spend about $46,500 in this example. If you move over to age 65, not only is your pension a little bit higher but you’ve got Social Security and you can withdraw more from your portfolio. You get to 75 and now you’re approaching $100,000 and Joe, we talk about this all the time in terms of how much you can actually spend. You can spend a lot more if you retire later. The whole goal of retiring at 55 is a great, admirable goal but it’s almost impossible in today’s environment. You have to have a lot more money saved, and we’re living a heck of a lot longer, so 75 should be the new retirement game plan because you’re going to still probably have a 20-year retirement.”

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