Retirement Net Worth Health
While there are many philosophies on how to handle retirement including maximizing savings so that they can be left to children/grandchildren, this article will only be giving insight into how much money one can safely pull from savings at a given time.
The goal of this is to help one understand where they stand financially and how they can maximize their retirement.
To put this simply our goal is to find the maximum sustainable withdrawal rate given several factors involved in retirement. As we can see from the following figure, costs change dramatically over the course of one's retirement.
Additionally, the amount of money it takes to maintain a lifestyle changes over time. Typically, expenses decrease after retirement (especially among early retirees) and then increases later on in retirement as helcare costs increase. The following graph displays this “retirement smile” whereby retirement expenditures decrease among younger retirees when they first retire and then increase as healthcare expenditures rise.
Given all of this the following information will be used to calculate your maximum safe withdrawal rate.