The investment business is full of theories and recommendations about how to accumulate wealth. But the field has very little to say about the best ways to decumulate, or spend down wealth.
The best way to safely decumulate wealth It is with that in mind that I will explain the surprising result of my own research. Bengen assumed a portfolio of 60% stocks and 40% bonds. Because an investor wouldn’t have run out of money given the past history of the stock and bond markets, even over a long life, Bengen declared this withdrawal strategy “safe.”
Is this really the most that a retiree can spend with a high level of protection against running out of money? Simple annuity A simple annuity, also called a single premium immediate annuity or SPIA, is a financial instrument that guarantees you a consistent monthly income as long as you live. It should not be confused with the much more complicated, expensive, and much less useful annuities with other names, such as variable annuities or fixed-income annuities.