According to Kiplinger, "The biggest threat to retirement wealth is withdrawing too much money from a shrinking nest egg, because there may not be enough left to benefit from the inevitable market rebound."
That statement is correct, and it argues for "time-segmenting" your retirement savings. Time-segmentation makes it easier to align your retirement timeline with your investment strategy. It may also help you mitigate Timing Risk and Inflation Risk. By supplementing Social Security with a deferred income annuity, you can also better protect against Longevity Risk- the possibility of outliving your income.
In one popular approach your deposit is shown as being allocated to six "segments" that will hold investment assets ranging from very conservative to aggressive. Segment One, the most conservative, receives the largest portion of your deposit - 28%. Successive segments receive, 26%, 20%, 13% 7% and 6% (total 100%). The segments receiving the smallest amount of money are those which hold progressively more aggressive assets. The more aggressive an investment, the more risk it is subject to. These segments will be held for the longest period of time in order to achieve the best possible chance of excellent investing results.
*These percentages will vary based on your NextPhase™ Personalized Analysis.
Retirees who have saved just enough are well-served.