RRSP withdraw method in Richmond

2. Many calculations are necessary to determine this amount. Perhaps the most important is figuring the amount of money you can safely withdraw from your portfolio each year. You will need to accumulate an asset base large enough to generate the income you need for the rest of your life, while minimizing the risk of depleting your nest egg later when you might need it most and may be the most financially vulnerable.

3. The issue of a safe withdrawal rate has been studied for a long time by academic and professional researchers. Institutional investors, such as pension plans and endowment funds, did much of the early work on this subject, but in the last ten or so years several studies have focused on the specific needs of individual investors. The results of these studies are generally consistent with each other, but have subtle differences that yield important lessons.

4. Researchers simulated the returns of various investment portfolios and withdrawal rates to find the probability of a portfolio surviving 30 years given their assumptions. The presumption was that what worked in the past will likely work in the future and that past market returns are good estimates of future returns.

5. The attraction of using this methodology is that it reflects actual market conditions. One can calculate with certainty the maximum withdrawal rate that would have worked through the exact the time period studied. For example, the adverse economic and market conditions that faced a new retiree in 1973 were the worst on record due to the high inflation and low real asset returns that, with hindsight, we know occurred during the 1970s. It can be comforting to know that you have a plan in place that would have survived such a period of extreme and unmatched difficulty.

6. Plantax Pacific Financial Inc Unit 148, 10451 Shellbridge Way Richmond, BC V6X 2W8 Canada Phone: 604 273 0388 Fax: 604 273 0389 admin@plantax.ca https://www.facebook.com/plantaxfinancial/