How Much of Your Retirement Savings Should You Withdraw Each Year?
When Fidelity Investments asked more than 1,000 pre-retirees to guess the percentage that retirement planners would recommend, 19% said 7-9% a year. (A typical recommendation might be 4%.) Additionally, another 19% of pre-retirees responding to the investment company’s Retirement IQ survey thought they could safely draw down their retirement funds at a rate of 10-15% a year. At that pace, they could risk outliving their money by their mid-seventies.
If interest rates were a few percentage points higher in this bull market, such large annual withdrawals might be bearable. As interest rates are still low, many debt securities currently offer small yields. That forces today’s retirees to rely on equities to a degree their parents did not. Wall Street remains volatile, and some analysts see the major equity indices making only minor annual advances in the near term. Whether their predictions prove true or false, a yearly withdrawal rate of 3-5% may help a retirement fund last much longer than one subjected to annual 7-9% distributions. 1
Are Golf Carts a Safety Risk?
In some Sun Belt communities, retirees drive them off the links to run errands or eat out. While these electric vehicles are easy to operate and better for the environment than a gas guzzler, their open architecture can make them extremely dangerous in collisions with cars, bicycles, and obstacles. Just how dangerous? By the estimate of the Consumer Product Safety Commission, there were nearly 18,000 emergency room visits stemming from golf cart-related injuries in the U.S. during 2015.
Even so, almost 400 American towns and cities permit golf carts on their streets, and drivers have learned to watch out for them. In some suburban retirement villages without adequate public transit, a golf cart trip takes the place of a bus ride. As a New York Times article notes, many of the serious injuries and occasional fatalities related to golf cart use are linked to impaired or underage drivers losing control of the cart or people falling out of the cart during sharp turns. 2
On the BRIGHT SIDE
Fidelity says that during the fourth quarter of 2016, the average employee directed 8.4% of his or her salary into one of its workplace retirement plans – the highest percentage seen in nearly a decade. 3
CITATIONS.
1 – time.com/money/4689984/safe-withdrawal-rate-retirement/ [3/6/17]
2 – nytimes.com/2017/03/04/business/retirement/the-mostly-safe-golf-cart.html [3/4/17]
3 – fool.com/investing/2017/02/12/the-average-americans-401k-balance-has-never-been.aspx [2/12/17]
4 – todayifoundout.com/index.php/2014/01/west-new-year-begin-january-1/ [1/30/14]
“You must learn from the mistakes of others. You can’t possibly live long enough to make them all yourself.”
– Sam Levenson
HEALTH TIP
Lean “fuels” may make
losing fat a little easier
Trying to burn fat while you exercise? Eating certain carbohydrates might help, particularly those with a low glycemic index load, such as, beans, peas, lentils, and oat bran.
BRAIN TEASER
Walking With The Fishes?
A man walked across the surface of a lake on his own two feet. How did he do it?*
DID YOU KNOW?
Julius Caesar created our current calendar
In 46 B.C., the Roman emperor decreed that a year would begin on January 1 and last 365 days, with an extra day added every four years to properly reflect the Earth’s orbit of the sun. Before that, three out of every four Roman years lasted 355 days, while every fourth year lasted either 377 or 378 days. 4
