Don’t know if your savings will last?
Traditional financial plans say you can withdraw 4% of your initial portfolio value every year (with inflation adjustments). But low interest rates or a long bear market may force you to adapt. If you’re concerned about outliving your savings, plan to be flexible with withdrawals. “People get anchored to a specific amount, but you need to review it and make corrections occasionally,” says Steve Lowrie of Lowrie Financial in Toronto.
Being flexible about your retirement date helps too. Do the math and you’ll be amazed at the difference if you work a year or two longer: you get an extra year of income and an extra year with no withdrawals from the portfolio. Working part-time in retirement will also help your savings last.
You should never take more investment risk that you can stomach, but your portfolio will likely last longer if you allocate more to stocks. A mix of 50% stocks and 50% bonds might be suitable for disciplined retirees.
See more and read the whole article here: canadianbusiness.com
From Dan Bortolotti