Retirement planning is in some respects similar to preparing for battle. While in retirement planning, lives may not be in danger, both do have in common the goal of seeking to maintain independence and dignity. And in retirement the enemy isn’t military aggression, but aggressive inflation, poor sequences of returns and outliving your money.
Our previous story illustrates the problem with focusing on a single-line projection in retirement planning. The fundamental problem is that using straight-line projection creates an illusion of precision, and gives an impression that there is only one plausible outcome. In reality, the exact future outcome is unknown and unknowable. So it’s important that we consider a wide range of plausible scenarios.
In this article, we consider the reasons why straight-line-projections are woefully inadequate when illustrating sustainability of income in retirement. Read More
The fundamental question we’re trying to answer in retirement planning is this: will the money outlive the people or will the people outlive the money? The problem is we simply won’t know for sure until the event has happened, by which time it’s too late to plan. Without the proverbial crystal ball, it’s impossible to come up with the perfect withdrawal strategy. The future is inherently unknown, so how do we make decisions? The answer is that we think in terms of probabilities. Read More
We're delighted to announce a new feature on Timeline which enables planners to illustrate the benefits of scaling up/down withdrawals at different phases of retirement
The traditional assumption for sustainable withdrawal rate is that a client will spend the same amount of inflation adjusted income throughout their retirement. This assumption is not supported by cold hard data on spending pattern of retirees.
Research in the UK shows spending in retirement declines progressively in real terms. From age 65, spending typically declines progressively and is about 35% lower at age 80. Read More
We are very pleased to let you know that we've now added the PDF report feature to Timeline, the sustainable withdrawal rate app.
With this feature, financial planners can now produce a personalised Withdrawal Policy Statement for their clients at the click of a button! How cool is that? Read More