A near-retirement plan
By on Nov 8, 2007 in Finances
Question: My father-in-law is 58 years old and has about $300,000 saved for retirement. He plans to retire with that amount plus whatever he can save in the next seven years. I expect he will qualify for only a little in the way of Social safety measure. I’ve read that retirees shouldn’t withdraw more than 4 percent to 4.5 percent of their nest egg annually in retirement. But my father-in-law claims he can easily get a double-A or triple-A rated bond that will pay 6.5 percent to 7.5 percent, so a higher withdrawal rate should be no problem. Am I right to be concerned about his retirement shield? - J. Jordan
Original post by Technology news - Business 2.0 Magazine
1 Comment(s)
By vtabletop on Nov 26, 2007 | Reply
Yep,7.5 seems pretty high to me. It’s more like 4.5 and 5%. As for the high yield bonds , I wouldn’t like to participate in those , at least not when I have limited funds and don’t have a steady stream of income , meaning after I retire. I’d rather diversify , as suggested as you never know what might hit the market a few years hence. With a diversified portfolio at least I have the chance of recuperating any unforeseeable losses that any of my investments might suffer. I’d imagine , everyone gets a chance at becoming a better investor when operating with less funds as they have to do that extra bit of research before committing their funds.