Insights | 11.29.21
Market-Adjusted Retirement Withdrawals Can Benefit Clients, Morningstar Says
Morningstar research determined that more rigorous market-driven retirement withdrawals can work to retirees' advantage in both starting and lifetime withdrawals. The company found a 3.3% starting withdrawal amount will probably be sustainable for balanced portfolios over a 30-year time horizon, while Morningstar's Christine Benz said even modest adjustments to the withdrawal system can help raise starting withdrawal amounts. At the same time, truly flexible withdrawal strategies like the guardrails strategy can boost starting and lifetime withdrawals even further. Benz cautioned, however, that a flexible withdrawal approach "can also lead to undesirable volatility in household cash flows. In short, they may not be very livable."
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