Rating
Title	How Withdrawal Sequence Affects The Longevity And Risk of Retirees Portfolios: Additional Evidence
Author(s)	Irons, Robert; Weigand, Robert A.
Description	We examine the effect of the withdrawal sequencing decision on the longevity of retirees' portfolios by comparing the strategy of consuming bond assets first with maintaining a 50/50 stock/bond portfolio and consuming stock assets first. Using a long time series of data, we find that consuming bonds first consistently extends investor portfolios, although in about ten percent of the cases the strategy does not outperform the other methods. We also identify a market signal that effectively predicts when a bonds-first strategy will produce the largest gains. Based on current values of the signal, it appears that retirees in 2007 should be cautious about consuming bond assets first, as the strategy is currently unlikely to result in the same extension of portfolio longevity as it has historically.
Subject	Portfolio longevity; Portfolio management; Retirement planning; Withdrawal sequencing
Publisher	Washburn University, School of Business
Date	August 2007
Type	Working paper
Format	PDF
Series/Report No.	School of Business Working Paper Series; No. 88
Language	Eng

How Withdrawal Sequence Affects The Longevity And Risk of Retirees Portfolios: Additional Evidence

Description