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Funding Retirement: How Long Will My Money Last?
- 1. Funding retirement –
How long will my money last?
When drawing retirement income, greater returns, even if accompanied by greater volatility,
can increase the amount of time an investor can withdraw from their portfolio.
Taking $5,000 a year from $100,000 cash that is not earning income guarantees that the savings
will be depleted in 20 years.
An investor investing in a moderate portfolio can potentially take $5,000 per year for 32 years.
35
9 9 % c e r ta i n t y
32
Moderate Portfolio
24 years
9 7 % c e r ta i n t y
9 5 % c e r ta i n t y
28.5 years
32 years
30
28.5
Years of income
Cash provides certainty for 20 years after which time it is depleted.
The Monte Carlo Analysis uses 10,000 scenarios and assumes the following:
25
33Cash has an annual rate of return and standard deviation of 0%
33Fixed income has an annual rate of return of 3.5% and standard deviation of 4.5%
33Equity has an annual rate of return of 8.5% and standard deviation of 13.0%
33Moderate portfolio assumes 60% equity; 40% fixed income
24
20
15
m o d e r at e p o r t f o l i o
9 9 % c e r ta i n
9 7 % c e r ta i n
9 5 % c e r ta i n
SHANNON BOSCHY BFA, CFP
Mutual Funds Representative, Financial Security Advisor
Investors Group Financial Services Inc.
Financial Services Firm
Tel: (613) 282-5370
Shannon.Boschy@investorsgroup.com
Insurance products and services distributed through I.G. Insurance Services Inc. Insurance license sponsored by
The Great-West Life Assurance Company. Written and published by Investors Group as a general source of information only. Not intended as a solicitation to buy or sell specific investments, or to provide tax, legal or investment
advice. Seek advice on your specific circumstances from an Investors Group Consultant.
Trademarks, including Investors Group, are owned by IGM Financial Inc. and licensed to its subsidiary corporations.
© Investors Group Inc. 2011 MP1763 (10/2011)