Will 2000-era retirees experience the worst retirement outcomes in U.S. history? A progress report after 10 years
AbstractWe find evidence that retirees in 2000, in particular, are on course to potentially experience the worst retirement outcomes of any retiree since 1926. This holds for a wide variety of asset allocations and withdrawal rate strategies. Wealth depletion is taking place more rapidly for 2000-era retirees than for retirees who even endured the Great Depression or the stagflation of the 1970s. Though moderate inflation during the past decade has resulted in current withdrawal rates that are a bit less for the 2000 retiree than for some retirees in the 1960s, this is hardly reassuring with further analysis based on the required future asset returns needed for sustainability. Our findings cast doubt as to whether the 4 percent withdrawal rate rule will be sustainable for turn-of-the-century retirees.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27107.
Date of creation: 29 Nov 2010
Date of revision:
retirement planning; safe withdrawal rates; sequence of returns risk; retirement ruin; retiring in 2000; current withdrawal rate;
Find related papers by JEL classification:
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
- N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
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- Wade D. Pfau, 2010. "An International Perspective on Safe Withdrawal Rates from Retirement Savings: The Demise of the 4 Percent Rule?," GRIPS Discussion Papers 10-12, National Graduate Institute for Policy Studies, revised Oct 2010.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- How Much is Too Much? (Wall Street Journal)
by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2011-11-19 16:03:00
- Wall Street Journal: How Much Is Too Much?
by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2011-11-19 03:45:00
- Safe Savings Rates & Current Withdrawal Rates
by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2011-04-25 05:16:00
- Trinity Study Updates
by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2011-04-01 12:46:00
- Three Scholarly Articles - BusinessWeek
by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2010-12-18 13:46:00
- Will 2000-Era Retirees Experience the Worst Retirement Outcomes in U.S. History? A Progress Report After 10 Years
by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2010-12-01 06:12:00
- Bill Bengens How Much is Enough?
by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2012-05-18 03:20:00
- Updated Situation for 2000 Retirees
by Wade Pfau in Pensions, Retirement Planning, and Economics Blog on 2012-06-18 03:24:00
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