Withdrawl comparisons with age
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The document presents a table detailing withdrawal percentages and expected returns based on age and portfolio characteristics over a span of 40 years. It highlights how the withdrawal percentage is adjusted according to the aging process and provides various scenarios based on equity distributions. The emphasis is on managing withdrawal percentages prudently and the impact of standard deviation on returns.
Withdrawl comparisons with age
- 1. Begin Yr# End Age POF Withdraw% After Reduce Withdraw% After Reduce Withdraw% After Reduce 1 61 10.00% 4.30% 4.17% 4.37% 4.24% 4.03% 3.90% 2 62 10.00% 4.38% 4.24% 4.44% 4.30% 4.09% 3.96% 3 63 10.00% 4.46% 4.32% 4.52% 4.37% 4.16% 4.02% 4 64 10.00% 4.55% 4.39% 4.59% 4.44% 4.23% 4.09% 5 65 10.00% 4.55% 4.39% 4.59% 4.44% 4.23% 4.09% 6 66 10.00% 4.64% 4.48% 4.67% 4.51% 4.31% 4.16% 7 67 10.00% 4.73% 4.56% 4.76% 4.59% 4.40% 4.24% 8 68 10.00% 4.84% 4.66% 4.86% 4.68% 4.48% 4.32% 9 69 10.00% 4.96% 4.77% 4.98% 4.79% 4.58% 4.41% 10 70 10.00% 4.96% 4.77% 4.98% 4.79% 4.58% 4.41% 11 71 10.00% 5.08% 4.88% 5.10% 4.89% 4.70% 4.51% 12 72 10.00% 5.22% 5.01% 5.22% 5.01% 4.81% 4.61% 13 73 10.00% 5.38% 5.14% 5.36% 5.13% 4.93% 4.72% 14 74 10.00% 5.54% 5.29% 5.52% 5.27% 5.08% 4.85% 15 75 10.00% 5.54% 5.29% 5.52% 5.27% 5.08% 4.85% 16 76 10.00% 5.72% 5.45% 5.70% 5.43% 5.24% 4.99% 17 77 10.00% 5.72% 5.45% 5.70% 5.43% 5.24% 4.99% 18 78 10.00% 5.93% 5.63% 5.89% 5.59% 5.42% 5.15% 19 79 10.00% 6.15% 5.83% 6.11% 5.79% 5.62% 5.33% 20 80 10.00% 6.15% 5.83% 6.11% 5.79% 5.62% 5.33% 21 81 10.00% 6.41% 6.05% 6.36% 6.01% 5.86% 5.53% 22 82 10.00% 6.70% 6.31% 6.64% 6.25% 6.12% 5.76% 23 83 10.00% 7.04% 6.60% 6.98% 6.54% 6.45% 6.05% 24 84 10.00% 7.04% 6.60% 6.98% 6.54% 6.45% 6.05% 25 85 10.00% 7.04% 6.60% 6.98% 6.54% 6.45% 6.05% 26 86 10.00% 7.43% 6.93% 7.35% 6.86% 6.80% 6.35% 27 87 10.00% 7.85% 7.29% 7.75% 7.20% 7.18% 6.67% 28 88 10.00% 7.85% 7.29% 7.75% 7.20% 7.18% 6.67% 29 89 10.00% 8.35% 7.71% 8.23% 7.60% 7.64% 7.05% 30 90 10.00% 8.35% 7.71% 8.23% 7.60% 7.64% 7.05% 31 91 10.00% 8.35% 7.71% 8.23% 7.60% 7.64% 7.05% 32 92 10.00% 8.92% 8.18% 8.80% 8.07% 8.18% 7.49% 33 93 10.00% 9.61% 8.74% 9.45% 8.59% 8.79% 7.99% 34 94 10.00% 9.61% 8.74% 9.45% 8.59% 8.79% 7.99% 35 95 10.00% 14.41% 12.35% 14.13% 12.11% 13.25% 11.36% 36 96 10.00% 16.67% 13.89% 16.34% 13.62% 15.41% 12.84% 37 97 10.00% 16.67% 13.89% 16.34% 13.62% 15.41% 12.84% 38 98 10.00% 16.67% 13.89% 16.34% 13.62% 15.41% 12.84% 39 99 10.00% 19.80% 15.84% 19.44% 15.55% 18.38% 14.70% 40 100 10.00% 19.80% 15.84% 19.44% 15.55% 18.38% 14.70% *Real *Std Dev **Real **Std Dev ***Real ***Std Dev 4.39% 6.45% 5.41% 8.89% 6.83% 13.73% In actual practice, both the returns and the period life tables would have updated data that would be used for subsequent recalculations each year in the future. Bold values represent both highest withdrawal% based on given portfolio risk and return characteristics, and withdrawal% reduction to reduce exponential effect that comes from reduced expected time remaining due to aging. What returns give, standard deviation takes away. Withdraw% reduction = WR% * (1 - 1/n) where n= expected years remaining from life tables (annuity). The objective is not to maximize WR% alone - but to manage it prudently based on portfolio characteristics and time. 20% Equity* 40% Equity** 60% Equity***