Whatever dreams and aspirations people may have for their retirement, one goal usually tops the list: Don't run out of money.
"People want a 100 percent chance of not outliving their money," said certified financial planner David John Marotta, founder and president of Marotta Wealth Management. To avoid depleting funds prematurely, he said, the key is to determine a safe rate of withdrawal from retirement assets.
For most Americans, that means balancing lifestyle objectives with other financial goals common to retirees, such as gifting to family and charities or leaving a legacy for others. While budgeting discipline is important for everyone, it is crucial for people near or in retirement. "People want a precise budget they can live by," Marotta said.
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The average age of Marotta's clients is 61 when they come to him, and he helps them determine how they can live to 100 on their own resources. He spent a year and a half researching safe withdrawal rates and has calculated that at age 65, a retired person can safely spend 4.36 percent of his or her assets annually. As the retiree ages, the rate of withdrawal rises. If the markets do well, the withdrawal rate can be raised further; if it does poorly, it should be adjusted down. If retirees spend more than that, Marotta said, they run the risk of becoming a burden to someone else down the road.