Once you retire, you’ll have to start tapping into your investment portfolio. How can you avoid taking out so much that you risk outliving your resources?
You’ll need to establish a proper withdrawal rate – the percentage of your portfolio’s value needed for one year’s worth of retirement expenses. Ideally, it could stick with this rate, your portfolio would last as long as you do.
When you start your retirement, you might want to go with a more conservative rate. This could be especially helpful when the financial markets have declined. Yet, even starting with a more modest rate, you may need to make adjustments periodically.
So, when the markets have declined, how should you respond? You could cut down on your spending, so you would need less money from your investments. But if you have already been withdrawing a modest amount, adjustments may not be necessary.
The key is to review your withdrawals with your financial advisor to determine if you remain on track or if adjustments need to be made.
If you have any questions, please contact me at 980-859-2549 or by e-mail at Brandon.Monette@edwardjones.com
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.