What You Don’t Know Can Hurt You

A: Janet, if you are planning for low-interest rates to last, you might want to take a second look at your withdrawal rates in retirement. It seems that a 2.8% withdrawal rate over a retirement period of 30 years, with a 40% allocation to stocks, is the recipe for a 90% success rate — if interest rates continue to stay low, according to a recent study by David Blanchett, head of retirement research at Morningstar Inc.’s investment management division.

However, although the probability may increase with lower stock allocations, this isn’t a fit for everyone. The key is eliminating the key retirement risks that can implode your successful retirement plan.

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