Manage your retirement expectations

Retiring soon? You need a realistic withdrawal plan.



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Be realistic about how much you can withdraw from your retirement portfolio each year.

Many new retirees assume they can spend 7% to 10% of their nest egg every year. That’s fine in a rising stock market, but if the market slumps and you keep spending at that rate you’ll quickly deplete your savings.

To make your money last, you should plan to withdraw only about 4% a year.

2 comments on “Manage your retirement expectations

  1. Yeah, right, if you plan to live to 90. What's the point.
    Don't skimp, 4% is silly, go with 6%.


  2. Most financial folks I have spoken with suggest 'throttling' withdrawals as your need for income is greater in your early years of retirement when you are likely to be more active etc. That said using a figure of 4 or even 6% may not provide adequately for a reasonable life style. The other and perhaps most important point is that the base amount on which you are calculating this withdrawal. Even at $1M in the kitty that doesn't provide much in retirement particularly if that amount is supporting two people which for many will be the case in the early days of retirement. What is not factored in here is CPP and Old Age Pension which helps some.


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