Harvest Portfolios Group

Will my savings last through retirement?

February 25, 2020
Will my savings last through retirement?

When determining how long into retirement your savings will last, portfolio returns are certainly a factor, and the higher the return the better, obviously. But the order or “sequence” of returns will also impact your savings’ longevity. Returns change over time—portfolios don’t earn the same rate of return year after year. Regular withdrawals continue to reduce your portfolio’s dollar value, and that dollar value is the amount upon which future returns compound. So, if a large number of negative return rates occur at the start of your retirement, it will naturally reduce the base upon which future positive returns can compound. When this happens, it reduces the amount of income you can withdraw, so your savings may run out sooner than if the returns had been positive at the start of your retirement.

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The views and/or opinions expressed in the article are of a general nature and are for informational purposes only. Article contents should not be considered as advice and/or a recommendation to purchase or sell the mentioned securities or used to engage in personal investment strategies. Investors should consult their investment advisor before making any investment decision. 

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