Optimum Withdrawals from An Asset Pool

Jarrett, Jaye C.; Stringfellow, Tom
January 2000
Journal of Financial Planning;Jan2000, Vol. 13 Issue 1, p80
Academic Journal
This Paper examines and defines maximum initial percentage cash withdrawals from asset pools that have structured time horizons, desired ending value of the portfolios, various portfolios asset allocation parameters and a specific confidence level of success. In this we examine two withdrawal methodologies: (1) maintaining a fixed annual cash flow and (2) adjusting each subsequent year by the prior period's inflation rate. Finally, we examine three ending values of the asset pool. In addition, we strive to define the worst-case scenario in which the asset pool falls to zero, a scenario that maintains its original value and a scenario where the asset pool is increased (by the underlying inflation rate).


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