Abstract
In <b>Perfect Withdrawal in a Noisy World: Investing Lessons with and without Annuities while in Drawdown between 2000 and 2019</b>, from the Summer 2021 issue of <b><i>The Journal of Retirement</i></b>, authors <b>Andrew Clare</b> (of <b>Bayes Business School</b>), <b>James Seaton</b> (of <b>Solent Systematic Investment Strategies</b>), <b>Peter Smith</b> (of the <b>University of York</b>), and <b>Stephen Thomas</b> (of <b>Bayes</b><b>Business School</b>) take a new approach to determining how to draw income from retirement savings without running out of money. Many researchers have sought the perfect withdrawal rate (PWR) from a portfolio of stable assets. This may be unrealistic because many retirees invest in volatile assets like stocks. Clare et al. analyzed how retirees would have fared by taking a PWR from a variable portfolio from 2000 to 2019. They found that due to market fluctuations, withdrawing the same amount each year increased the risk of running out of money. However, annually recalculating the PWR while reallocating assets to cash using a glidepath improved outcomes. They also considered retirees who want money left over after 20 years to buy a delayed annuity. Since annuity prices fluctuate, the amount needed is a moving target. The authors recommended taking adaptive withdrawals in conservative amounts, following a glidepath, and overestimating the eventual price of a delayed annuity.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
