Withdrawal strategies in a bear market

Everyday Wealth

Jean Chatzky

Investing, Business, Education

2 • 935 Ratings

🗓️ 5 September 2022

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

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Summary

Jean and Soledad, joined by Edelman Financial Engines wealth planner Isabel Barrow, explore the pros and cons of different withdrawal strategies and how a wealth planner could help you determine which fit your personal economy.

Investing strategies, such as asset allocation, diversification, or rebalancing do not assure or guarantee better performance and cannot eliminate the risk of investment losses. There are no guarantees that a portfolio employing these or any other strategy will outperform a portfolio that does not engage in such strategies. Funds and ETFs are subject to risk, including loss of principal. All investments have inherent risks. There can be no assurance that the investment strategy proposed will obtain its goal. Past performance does not guarantee future results.

Dollar Cost Averaging does not assure a profit or protect against a loss in a declining market. For the strategy to be effective, you must continue to purchase shares in both up and down markets. As such, an investor needs to consider his/her financial ability to continuously invest through periods of low-price levels.

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Transcript

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0:00.0	This is Edelman Financial Engines Everyday Well, with Award-winning journalist Soledad O'Brien,
0:13.0	personal finance expert Jean Chatsky,
0:15.0	and Edelman Financial Engine's wealth planner Isabel Vero.
0:19.0	So markets are down, account values are down,
0:22.0	everybody's purchasing power is eroding quite a bit.
0:26.0	So if you're well into your retirement, let's talk about withdrawal strategies then.
0:31.0	Right, and let's actually focus on withdrawal strategies for people who are at the beginning of retirement
0:38.3	as well.
0:39.3	So Isabel, what are some important considerations for a good withdrawal strategy?
0:45.0	Well, the withdrawal strategy is really thinking about three things.
0:50.0	The first of which is to be able to provide an income stream, you need the income to support the
0:55.9	goals and all of the dreams that you had and created it throughout your life and that you had set up
1:00.5	for retirement. That withdrawal strategy also needs to help to manage the
1:06.1	taxes that you're going to pay.
1:08.0	So how much you're taking out every year is going to be a factor in what taxes you owe and what you're going to have to
1:14.2	pay on your Social Security income tax and over the course of your entire
1:17.3	retirement because yeah a lot of sources of retirement income are ones that are taxable at least on the federal level and then
1:25.5	I think last but definitely not least that withdrawal strategy needs to be one
1:30.0	that you can feel financially secure with throughout your entire retirement with all market
1:35.6	conditions taken into account. Meaning we've already planned that withdrawal strategy to know
1:41.2	it's sustainable in a recession or bare market or volatile market
1:46.5	we've taken into account inflation so all of those things are really important
	...

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