Include a critical asset in your retirement strategy: Flexibility

Take an approach that helps you adjust to changes in the market and your life.

22 Mar 2019

Questions you can ask your UBS Financial Advisor:

  • How much can I safely withdraw from my portfolio each year?
  • Why shouldn’t I just follow the traditional “4% rule”?
  • How can I adjust my budget and spending to reduce uncertainty?

Whether you’re near or in retirement, you need a strategy to help manage your spending to help prevent you from outliving your money. Many follow a fixed “4% rule”, but the truth is, life doesn’t stand still—and neither does the market. Which is why flexibility is key. That’s why UBS suggests flexible spending levels that adjust to ups and downs, both in the market and your expenses.

To help you stay on track with an effective spending strategy during retirement, here are a few highlights from our latest Modern Retirement Monthly (PDF, 154 KB).

  • The 4% rule can leave you vulnerable to significant risks and uncertainties. Developed in the late ’90s, the rule doesn’t account for how, today, people live longer and there’s a greater risk to outliving your money. And any fixed rate amount can’t be responsive to changes in portfolio return and household expenses.
  • A dynamic strategy provides the flexibility you need to budget and spend wisely. Change is inevitable during retirement, especially when it can last several decades. Being able to adjust your spending rate helps you be prepared.
  • An Annualized Recalculated Virtual Annuity (ARVA) can be an effective approach. An ARVA utilizes core concepts found in annuities to allow precise withdrawal recalculations that change with your portfolio size and time horizon — all without purchasing an actual annuity.

Are you spending within your means? Together we can find an answer. Connect with your UBS Financial Advisor today or find one.