TITLE

Joint Life Expectancy and the Retirement Distribution Period

AUTHOR(S)
Blanchett, David M.; Blanchett, Brian C.
PUB. DATE
December 2008
SOURCE
Journal of Financial Planning;Dec2008, Vol. 21 Issue 12, p54
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
• Past distribution research has focused primarily on determining sustainable withdrawal strategies based on fixed distribution periods, such as 30 years. While such research provides valuable information as to the likelihood of a portfolio failing over a predetermined period, it does not directly address the primary goal of retirees: to provide income for life. • For most retirees, a retirement income strategy is likely to be deemed a failure only if it fails while either or both members of the retired couple is still living. Based on this logic, this paper will explore the implications of using joint life expectancy versus a fixed period when determining the appropriate initial sustainable real withdrawal rate for a distribution portfolio. • Based on the research conducted for this papen a sustainable withdrawal rate based on a joint expectancy period results in a 1-2 percent higher withdrawal rate for the same probability of failure than one based on a comparable fixed period. • Using a target end date such as age 90, 95, or 100 is a simple method that can be used to determine an appropriate length for a distribution period for a retiring couple.
ACCESSION #
35665221

 

Related Articles

  • A Decision Matrix Approach to Retirement Income Portfolio Design. Spivack, H. Jeffrey; Nelling, Edward // Journal of Financial Planning;Aug2013, Vol. 26 Issue 8, p54 

    The article considers the design of retirement income portfolios by financial planners. A combination of decision matrices is proposed to incorporate the numerous and complicated variables in the creation of individual portfolios. The advantages to wealth management services of providing a...

  • Roth Conversion Strategies for Beneficiaries. Caudill, April // Journal of Financial Service Professionals;Jul2010, Vol. 64 Issue 4, p35 

    The combination of a Roth conversion and a long-term "stretch" strategy is a powerful estate planning tool and may be more appealing to a client than a lifetime Roth conversion. Advisors who recognize the planning issues and pitfalls can help their clients make a real difference with their...

  • WHAT IT TAKES TO RETIRE EARLY.  // Money;Jan2007, Vol. 36 Issue 1, p73 

    This article presents statistics about people who successfully retire early. Planning for early retirement includes saving one-third of take-home pay or more, making saving one's first priority, aggressive investing, banking extra income instead of spending it and designing a post-retirement career.

  • ASK THE EXPERT. Updegrave, Walter // Money;Sep2010, Vol. 39 Issue 8, p32 

    The article discusses how much money a person will need to have saved in order to retire comfortably. Although various Web sites exist that will calculate such values, the actual amount necessary will depend on a variety of factors including whether one has a mortgage in retirement, and what...

  • Feeling at Sea About Finances? A Planner Can Ease the Voyage. Hannon, Kerry // U.S. News & World Report;10/13/2008, Vol. 145 Issue 8, p61 

    This article offers six steps toward finding a financial adviser. The author suggests one should first research the different types of financial planners available, to ensure one is getting a legitimate professional. Some of the six steps discussed include: screening for credentials,...

  • Remodeling your financial house. Nance-Nash, Sheryl // Money;Feb1996, Vol. 25 Issue 2, Retirement living pB1 

    Discusses financial adjustments that come with retirement. Re-evaluating personal finances based on a change from living on what you made to living on what you have; Designing a budget; Increased leisure activity spending.

  • You can be too cautious.  // Money;Feb1996, Vol. 25 Issue 2, Retirement living pB5 

    Offers tabular information for managing investments after retirement.

  • Beyond retirement.  // DollarSense;Spring96, p10 

    Asserts that Americans after retirement should continue to monitor their portfolios. Rebalancing of portfolios or investment mix to ensure preservation of capital; Asset allocation; Medical expenses; Retirement planning. INSETS: States barred from taxing nonresident pensions.;Asset...

  • VaR Only as Good as the User's Imagination. Rossi, Clifford // American Banker;6/20/2012, Vol. 177 Issue 95, p8 

    The article opines the value-at-risk (VaR) model, a metric to estimate bad outcomes in market losses or "tail risk" in portfolio management, needs refinement because it is vulnerable to errors caused by unforeseen market conditions and mistaken assumptions.

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics