To give you a taste of how future returns can really play with an assumed safe withdrawal rate, here’s a simple graphic to illustrate. In each scenario you have the same time horizon, same average return over that time horizon (10%), and an equal number of years of 10% losses and 30% gains over the time period. The only difference between each scenario is the sequence over which you experience those losses....
A Decade of Low Returns Looms
According to a new report from advisory firm Research Affiliates, the next 10 years will bring low single-digits when it comes to expected real returns (defined as gross return less inflation) in a "typical balanced portfolio." In fact, their analysis projects that the odds of making even 5 percent on traditional investments over that time frame are slim....
Moving in the Right Direction
A little good news on the retirement savings front – a recent report from Fidelity Investments shows that people are saving more money for retirement and setting up more retirement accounts, with fewer savers borrowing from their funds. It’s an encouraging sign in the constant challenge for retirement security....
Yes, Taxes are Still Certain in Retirement
Tax season is in full swing, and by now your mail (or in) boxes have begun to be inundated with “IMPORTANT TAX DOCUMENTS ENCLOSED” correspondence. For the newly retired, their first tax season after leaving the workforce may catch them a bit by surprise. They are used to receiving a paycheck from their company, and their employer usually helped them when it came withholding taxes from their earnings...