Retirement withdrawals

Preventive reductions and risk management

Authors

  • John B. Mitchell Department of Finance and Law, Central Michigan University

DOI:

https://doi.org/10.61190/fsr.v20i1.4690

Keywords:

Monte Carlo, Withdrawals, Retirement

Abstract

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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Published

2011-03-31

How to Cite

Mitchell, J. B. (2011). Retirement withdrawals: Preventive reductions and risk management. Financial Services Review, 20(1), 45–59. https://doi.org/10.61190/fsr.v20i1.4690

Issue

Vol. 20 No. 1 (2011): FSR Spring 2011

Section

New Original Submission

License

Copyright (c) 2011 Academy of Financial Services

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