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Safe withdrawal rate vs. 10-year annualized real returns The link between stock market returns and a sustainable withdrawal…
Safe withdrawal rate vs. 10-year annualized real returns
The link between stock market returns and a sustainable withdrawal rate
Note: The chart shows what a retiree’s safe withdrawal rate would be given stock market returns in the first decade of retirement. Market returns account for inflation. Assumes a 30-year retirement. Analysis of market data through 2014.
Source: Michael Kitces of Kitces.com
Market valuations are high by historical standards
High valuations traditionally precede a bear market
Note: Market valuation data is based on the Shiller price-to-earnings ratio, which measures the price divided by the average, inflation-adjusted earnings from the previous 10 years. Data correspond with Jan. 1 of the listed year.
Source: http://www.multpl.com/shiller-pe
10-year Treasury yield is low by historical standards
Low yields mean retirees get lower returns on fixed-income assets
Note: Data correspond with Jan. 1 of the listed year.
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