Are you out of balance?
Advisors typically recommend rebalancing investment portfolios once every twelve months....
Have you calculated your “Retirement Balance Sheet?”
Individuals (and couples) also have balance sheets, including a Retirement Balance Sheet, where the assets must also equal the liabilities. Retirement planning is essentially creating the balance sheet and adopting strategies to ensure the assets = the obligations over time.
How much can I withdrawal from my portfolio each year in retirement?
Spending from your portfolio in retirement, or decumulation, on the other hand, is more challenging. During decumulation, you are subject to overspending, unplanned costs, and sequence of return risk. The sequence of return risk is the potential of a market downturn or crash early in retirement, which forces a retiree to sell investments at a discount and increases the likelihood of prematurely running out of money.