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>Retired investors are often more concerned with preservation of capital Retired investors should have a few years of draw-down available in low-risk investmen
by iaw 10y ago
>Retired investors are often more concerned with preservation of capital
Retired investors should have a few years of draw-down available in low-risk investments to mitigate market risks. In retirement there should be very little dependency on market forces.
If you have a couple million in the bank that you're drawing down at 4% then why do you care what the S&P is doing even if you have another couple million there?
- zeusk 10y agoDepends entirely on when they plan to retire and life expectancy. Yields went negative during the crisis and with 10 years since, have only returned to 75 to 100 bps while real interest rates still lie below 0%. 4% withdrawal rate with zero earnings/dividend/asset appreciation isn't very sustainable even with "a couple million" depending upon where they live and how big of a cushion they want. Also - let's not forget that during a crisis, there can be a run on the bank which could lead to liquidity crisis where a bank might have it's position unwound in unfavorable terms where not everyone gets back what they put in. Even FDIC only insures 250k per account per bank, AFAIK.
- Retric 9y agoYou can in theory be retired for a very long time 115 - 55 = 60 years. IMO, you should at least target a 5% survival chance which likely puts you out 30+ years if you retire mid 60's.
- deleted 9y ago[deleted]