The Perfect Withdrawal Amount: A Methodology for Creating Retirement Account Distribution Strategies

25 Pages Posted: 19 Jan 2015 Last revised: 18 Aug 2015

E. Dante Suarez

Trinity University

Antonio Suarez

Independent

D.T. Walz

Trinity University

Date Written: August 3, 2015

Abstract

We present a new way to develop withdrawal strategies from retirement portfolios. It is derived analytically, instead of from empirical testing, and it iterates always in the same manner. It is based on a new measure we develop, the Perfect Withdrawal Amount, for which we discuss how to construct a probability distribution and how to apply it sequentially. We also derive a new measure of sequencing risk. We present new strategies built with this framework.

Keywords: Retirement, Optimal withdrawal, Safe withdrawal rate, Withdrawal rule, Sequencing risk

JEL Classification: J26, D81, D14

Suggested Citation

Suarez, E. Dante and Suarez, Antonio and Walz, D.T., The Perfect Withdrawal Amount: A Methodology for Creating Retirement Account Distribution Strategies (August 3, 2015). Available at SSRN: https://ssrn.com/abstract=2551370 or http://dx.doi.org/10.2139/ssrn.2551370

E. Dante Suarez (Contact Author)

Trinity University ( email )

San Antonio, TX 78212
United States

Antonio Suarez

Independent ( email )

No Address Available

D.T. Walz

Trinity University ( email )

One Trinity Place
San Antonio, TX 78212
United States
210-999-7289 (Phone)
210-999-8134 (Fax)

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