Retirement withdrawals
Preventive reductions and risk management
DOI:
https://doi.org/10.61190/fsr.v20i1.4690Keywords:
Monte Carlo, Withdrawals, RetirementAbstract
This paper builds on Stout and Mitchell (2006), Stout (2008), Spitzer (2008), and Blanchett and Frank (2009) by creating a preventive approach to withdrawal management. Proactive strategies, reducing the withdrawal rate before there are insufficient funds, are shown to significantly reduce the probability of ruin while maintaining the median withdrawal rate. Subpopulation effects of strategy changes and improvements in reporting of results are explored. Data covers 1926-2008 and the life table is extended to 108 years. Optimization yields a 6.04% median withdrawal rate and 0.2% probability of ruin.
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