Coping with Sequence Risk: How Variable Withdrawal and Annuitization Improve Retirement Outcomes
نویسنده
چکیده
Both the level and the sequence of investment returns will have a big impact on retirement outcomes. Poor returns during the early years of retirement are bad news. However, the particular withdrawal strategy used affects sequence risk, and an approach where withdrawals are variable and respond to portfolio performance can improve retirement outcomes. I’ll examine the evidence and then use my own modeling to show how a strategy that combines variable withdrawals with partial annuitization using a single-premium immediate annuity (SPIA) maximizes the cash available for consumption.
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