, Newburyport, MA


August 14, 2012

The triathlon approach to retirement planning


If you are in your 60s, as all of the oldest boomers are, and you are healthy, you want those tax-deferred and taxable accounts to last for at least 30 years, if not longer. Therefore, you have to calibrate your withdrawal rate from these accounts to take your life expectancy and health, market performance or account growth, income-tax rates and inflation into consideration.

You need to realize enough in growth to cover inflation and taxes. If the performance of your accounts surpasses the effect of inflation and taxes, you are ahead in the game and may be entitled to a “raise” over your initial withdrawal rate.

The initial withdrawal rate is the percentage you withdraw for spending in your first year of retirement divided by the total value of your retirement accounts. Experts argue over the ideal initial withdrawal rate ranging from 3 percent to almost 6 percent. Picking that initial rate is the second event in this triathlon. If experts can’t agree on the ideal rate, you should consider engaging a qualified retirement income-planning coach to assist you.

The third event, which repeats itself every year for the rest of your life, is tweaking or recalibrating that withdrawal amount based on your age, health and the performance of your accounts, in addition to the impact of income taxes and inflation. The third event in a triathlon is always the toughest. You are exhausted and stretched. But sitting out this event could be a decision that’ll cost you a winning retirement.


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

Text Only | Photo Reprints

Special Features
Port Pics
AP Video
Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN Raw: Deadly Landslide Hits Indian Village Obama Chides House GOP for Pursuing Lawsuit New Bill Aims to Curb Sexual Assault on Campus Russia Counts Cost of New US, EU Sanctions 3Doodler Bring 3-D Printing to Your Hand Six PA Cops Indicted for Robbing Drug Dealers Britain Testing Driverless Cars on Roadways Raw: Thousands Flocking to German Crop Circle At Least 20 Chikungunya Cases in New Jersey Raw: Obama Eats Ribs in Kansas City In Virginia, the Rise of a New Space Coast Raw: Otters Enjoy Water Slides at Japan Zoo NCAA Settles Head-injury Suit, Will Change Rules Raw: Amphibious Landing Practice in Hawaii Raw: Weapons Fire Hits UN School in Gaza Raw: Rocket Launches Into Space With Cargo Ship Broken Water Main Floods UCLA