Journal of Financial Planning: December 1997
This article presents new findings in the author's ongoing research into asset allocation and withdrawal rates during retirement.
The goal, as before, is determining how much money clients can extract from their portfolio annually without running out. This article explores the effects of adding smallcap stocks and Treasury bills to the asset mix. Retirement scenarios are expanded to include retirement beginning on the first day of any quarter, rather than just on January 1, as in earlier research. Refined advice is
given on the selection of stock allocation within the "recommended" range, and earlier use of the term "risk tolerance" is corrected to "volatility tolerance." "Post-crash" planning issues, including "Black Hole" clients and "Withdrawal Envy," are examined. Finally, some corrections are made to earlier conclusions on planning for taxable portfolios.
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