Abstract

http://ssrn.com/abstract=1489657
 
 

References (23)



 
 

Citations (4)



 


 



Withdrawal Rate Strategies for Retirement Portfolios: Preventive Reductions and Risk Management


John B. Mitchell


Central Michigan University - Department of Finance and Law

October 15, 2009


Abstract:     
This paper builds on the work of Stout and Mitchell (2006), Stout (2008), and Blanchett and Frank (2009) by creating a preventive approach to withdrawal management. Proactive strategies, which reduce the withdrawal rate before there are insufficient funds, are shown to significantly reduce the probability of ruin (shortfall) while maintaining the average withdrawal rate. The paper also explores the micro effects of strategy changes by dividing the simulation iterations into groups which have been positively or negatively affected by any particular change, and demonstrates that conventional reporting of the effectiveness of withdrawal rate management techniques can be improved by examining additional moments of the distribution. Data covers 1926-2008 and the mortality table is extended to 108 years.

Number of Pages in PDF File: 20

Keywords: withdrawal rate, retirement, risk management

JEL Classification: G11, C15, I12, J26

working papers series


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Date posted: October 16, 2009  

Suggested Citation

Mitchell, John B., Withdrawal Rate Strategies for Retirement Portfolios: Preventive Reductions and Risk Management (October 15, 2009). Available at SSRN: http://ssrn.com/abstract=1489657 or http://dx.doi.org/10.2139/ssrn.1489657

Contact Information

John B. Mitchell (Contact Author)
Central Michigan University - Department of Finance and Law ( email )
328 Sloan Hall
Mount Pleasant, MI 48859
989-774-3651 (Phone)
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Download Rank: 88,154
References:  23
Citations:  4

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