Decision Rules/Safe Withdrawal Rates

“How much can I safely withdraw from my portfolio?” is one of the most important questions clients ask – especially today! The impact of applying dynamic decision policies to portfolio distributions has been one of financial planning’s hottest topics since 2004 when our speaker, published his award winning research in the Journal of Financial Planning, establishing higher safe withdrawal rates than the oft-quoted 4% static level. In March 2006, he co-authored followup research. Testing various balanced portfolios utilizing Monte Carlo analysis, it validated the 2004 findings and introduced two decision policies which act as “guardrails” to support higher initial withdrawal rates, introduce flexibility into distribution decision-making, and allow for purchasing power maintenance. These policies are then communicated with clients via a withdrawal policy statement that both establishes expectations and inspires confidence.

Specifically, you will learn to:

• Synthesize “safe withdrawal rate” research of recent years
• Apply these dynamic decision policies in your clients’ retirement planning
• Make decisions about when distributions should (and need not) be adjusted
• Utilize decision policies to help clients weather the current economic storms
• Clearly and simply communicate decision policies to your clients
• Create a withdrawal policy statement