Asset Allocation for Retirement Withdrawal Rates | SafeMoney

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Discover how asset allocation impacts your retirement withdrawal rate. Learn about safe money alternatives for a secure financial future. Explore now! You’ve heard it before: the best laid plans of mice and men often go astray. Through all stages of our personal and financial lives, we know there will inevitably be twists and turns. The market goes up, the market goes down. But there are safer routes than others for our money. While there’s no foolproof Waze app for retirement savings and investment, there are directions we can take—and avoid! First, Let’s Look at Your Withdrawal Rate. Two key players in the viability of your financial plan for retirement are the size of your retirement nest egg and the pace at which you plan to spend it. This is your withdrawal rate. After putting in the time and consideration to determine the magic number for your retirement and your intended rate to spend it down, you may have reservations about your actual investment portfolio and whether it will perform as expected to sustain you over time. Since no one can say how long you will live, our lens of The Rule of 100 helps add perspective to this all-important strategy of making sure your retirement income will last. Asset Allocation Plan When we look at the actual investment portfolio, we know that one factor which will have a big impact on your portfolio’s success or failure is your asset allocation plan, essentially your investment mix of stocks, bonds, and cash. It’s tricky – how conservative or aggressive should one be? If you are too conservative, you may heighten the risk of a shortfall. Conversely, if you are too aggressive, you run the risk of incurring a bigger loss than you could reasonably recoup over your in-retirement time horizon . Like the magic number, there’s no one-size-fits-all asset-allocation framework for retirement portfolios. Your age, spending rate, and income-producing retirement assets (like pensions and Social Security), among other variables, all contribute to and influence the individual decisions made.   3 Smart Asset Allocation Decisions in Retirement Here are a few ways to handle your portfolio and handle the conversations you have with your financial professionals about the right direction for it too. 1. Now Is Not the Time to Be Chasing Down th