How Much Should Retirees Withdraw?

Retirees can learn a lesson or two from The Godfather. They must keep their investments (friends) close, but their withdrawals (enemies) closer. The famous friends-and-enemies analogy, captured so evocatively in Mario Puzo’s seminal novel, resonates loudly in the corridors of retirement planning. Withdrawals, however, present an unsettling quandary for the average retiree. Is there an ideal rate of withdrawal? What should be my rate? Is it too divergent from what is normally admissible? While such posers are asked commonly, universally acceptable answers have remained elusive. Despite endless discussions on optimum rates, retirement strategists have generally failed to identify a workable consensus. Retirement savings collected over a lifetime must be leveraged when active income earners stop receiving salaries or profits from businesses. Retirees must then bravely face the...