, Newburyport, MA


September 11, 2012

The mystery of retirement confidence


These mind-numbing calculations do produce reports the average retiree can understand. They go well beyond the simple choice of a fixed withdrawal rate, common in much current retirement planning.

In order to compare all possible scenarios, we need to test when and how we claim our Social Security benefits, if and when we consider using bond ladders or annuities to boost our fixed income, and if and when we consider a reverse mortgage, either loan or line of credit.

The mystery of all of the retirement-landing options can be dispelled and our confidence in taking our first steps into retirement can be enhanced by running models for all of the variables we face: How much we have in retirement savings, our life expectancy, our tolerance for market volatility, how to structure distribution from our IRAs, and whether we want to leave anything to the next generation.

Common mistakes I see retirees make—mistakes that diminish either their long-term income or legacy—are continuing to chase return over income, claiming Social Security too soon, and avoiding serious consideration of annuities or reverse mortgages.

No one strategy suits everybody, any more than the classic rule-of-thumb strategy of the 4 percent withdrawal rate suits everybody. But we owe it to ourselves and our family to take a thorough look at all of possible retirement-income options available in order to make the best-informed choices for our long-term advantage.


Donald E. Askey, a fee-only financial adviser and planner with offices in Newburyport and Boston, can be reached at

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