![]() ![]() Altogether, I evaluated several hundred different scenarios. I developed a numerical model using historical market returns to analyze different withdrawal strategies for the major asset classes - stocks and bonds. This question has not been studied much, if at all, in the context of retirement withdrawals. But it leads to the next question: How do you choose your most valuable assets to sell? So, when living off assets in retirement, shouldn’t you try to sell the most valuable ones first? Wouldn’t that make your savings last longer, or allow you to spend more, or both? The answer seems obvious. And it’s best to sell them when they’re in favor. “Buy your straw hats in the winter.” An old Wall Street adage advises it’s best to buy assets when they are out of favor. But how does that lesson apply in retirement, when we must choose when and how to liquidate our accumulated assets? Trying to time the market by actively trading has been thoroughly debunked. Our best bet for building wealth over the long haul is to invest regularly in low-cost, broad-based index funds. Most of us know we can’t outperform the market by actively trading stocks. The payoff could mean extracting millions more income from your nest egg over the course of a long retirement. The secret is keeping it simple and using a consistent, value-driven approach. It all depends on how you withdraw from different asset classes like stocks and bonds. ![]() History shows that your success can vary widely using the same portfolio and the same overall withdrawal rate, without changing your investments or taking on more risk. I’ve done new research into the best retirement withdrawal strategies. Many retirees will use systematic withdrawals from an investment portfolio for retirement income. ![]()
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