Old Retirement Rules are Now in Question

The conventional wisdom of playing if safe in the bond market may not be good for retirees after all, says the New York Times.

The 4 percent annual withdrawal rule may also be out of date, according to the Pittsburgh Post-Gazette.

 

Comments (14)

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  1. Craig says:

    Yes, Inflationary measures made by the federal reserve have damaged a lot of people hopes at retirement in many different areas.

    • Nigel says:

      In what other ways?

      • Jess says:

        Well I know for sure one of the ways is a lot of retiree’s savings accounts aren’t adjusting to inflation, so the retiree’s are having to earn more money in retirement because money isn’t worth as much anymore.

  2. Jackie says:

    “You can also try to pay off your mortgage, so you have the option of tapping home equity if you need to supplement your income later.”

    Really interesting perspective. Is this talking about reverse home mortgages or something else?

    • Miguel says:

      I believe that it is, it’s borrowing against the equity of your home, so it must be some thing conceptually close to that.

  3. Jeff says:

    “$31,000 — about the equivalent of drawing down 3 percent a year on a portfolio of $1 million.” Wow, 31,000 is all you are going to get from social security? Most people don’t realize that they are going to need more than SS, they need to look into other options (outside of bonds obviously) and find better ways to gain capital to retiree happily.

    • Sally says:

      It is surprising to me that people haven’t thought about the futility of SS before. People have claimed that it was going to shut down years ago, granted people weren’t privy to the idea that our government was going to go into excessive debt, so they were off by a few year, but by no stretch of the imagination is this a new thing.

      • Nigel says:

        If the government would have partitioned social security and not spent the funds that are supposed to be used for SS for other programs, it would have been fine. Short-term thinking killed SS, but then again it was supposed to be a short-term program.

  4. Sally says:

    “Several rounds of intervention by the Federal Reserve and other central banks, aimed at stimulating a moribund economy, have helped to suppress rates, and so has low inflation. Low rates have led to cheaper mortgages and credit cards, helping to balance family budgets. But for savers, low rates have been a trial. ”

    Inflation and attempting to manipulate the market and create artificially low interest rates, are harming America’s elderly. Abolish the federal reserve!

    • Miguel says:

      Well based on contagion theory if we were to abolish the federal reserve, and our banks had another default that would bankrupt all of American and then it would spread to the world.

  5. Baker says:

    “If your portfolio’s income is below 4 percent, you can’t withdraw 4 percent annually, and add inflation adjustments, without depleting that portfolio over time.”

    And 4% is very hard to find in fixed income instruments.

  6. Geraldine says:

    I would say that the market is more on the rise and and becoming more stable. Seniors are flocking to this program for many good reasons. This website helped my parents get a reverse mortgage Reverse Mortgage Lenders Direct . com

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