The Hatfields Significant market setbacks in the first year of retirement Receive $651,641 over 25 years Ran out of retirement income at age 90
THE McCOYS No significant market setback until 21 years into retirement Receive $878,054 over 30 years; $2,721,569 left over
$2,721,569 McCoys at age 95
$500,000 Hatfield’s and McCoy’s retirement savings at age 65
$0 Hatfields at age 90
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AVERAGE ANNUAL NET RETURN 9%
This is a hypothetical example used for illustrative purposes only, assuming an initial portfolio value of $500,000. Chart assumes a 4% rate of withdrawal beginning in year 1, with a 2.4% annual increase of the net withdrawal amount to account for inflation. This is based off of Social Security Cost of Living Adjustments’ average increase from 1990 to 2018. Cost-of-Living Adjustment (COLA) Information, https://www.ssa.gov/cola/. Actual S&P 500 ® historical data from 12/29/1978 to 12/31/2008 has been used in this graph. The hypothetical illustration does not consider the impact of taxes, which would reduce all values. Time period selected because of the extreme volatility during the 2000s, to better illustrate the impact of significant losses early in retirement. Using the current time period would demonstrate less dramatic results. Returns are based upon the Standard & Poor’s ® 500 Index (S&P 500 ® Index) historical data from 1978 to 2008. S&P 500 ® Index returns for the Hatfields are in reverse chronological order. The S&P 500 ® Index is an unmanaged group of large company stocks. It is not possible to invest directly in an index. Past performance does not guarantee future results.
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