Murray State University
Diagnosing Retirement
Institution
Murray State University
Faculty Advisor/ Mentor
David Eaton
Abstract
It is day one of retirement and over the course of your working life you have accumulated a sum of money for your retirement. Perhaps this money is tied up in several investments or within a company retirement fund. The question becomes, what should be done with the money now that you have retired? Most would agree that your investment strategy in retirement should be different than it was in your working career, but how so? How will you guard this money against inflation, low investment returns, and unexpected illnesses? These, among others, are very pertinent questions that must be evaluated in the journey toward financial security in retirement. In retirement, your first concern is to preserve the capital you spent years working for and to keep this principle safe. This means that you need to be well diversified among many different asset classes-- herein lies the difference of opinion among the investing community in which there is no real consensus about the optimal strategy for your retirement funds. This paper addresses how your assets should best be allocated to preserve capital, maximize income, and minimize depletion. It investigates the major strategies from the media, academic and professional communities. In particular the research addresses questions such as: Once in retirement, what is the best investing strategy for the retirement money? What asset allocation should be used? What are the tax effects of certain strategies? How is the withdrawal rate a function of beginning principle?.
Diagnosing Retirement
It is day one of retirement and over the course of your working life you have accumulated a sum of money for your retirement. Perhaps this money is tied up in several investments or within a company retirement fund. The question becomes, what should be done with the money now that you have retired? Most would agree that your investment strategy in retirement should be different than it was in your working career, but how so? How will you guard this money against inflation, low investment returns, and unexpected illnesses? These, among others, are very pertinent questions that must be evaluated in the journey toward financial security in retirement. In retirement, your first concern is to preserve the capital you spent years working for and to keep this principle safe. This means that you need to be well diversified among many different asset classes-- herein lies the difference of opinion among the investing community in which there is no real consensus about the optimal strategy for your retirement funds. This paper addresses how your assets should best be allocated to preserve capital, maximize income, and minimize depletion. It investigates the major strategies from the media, academic and professional communities. In particular the research addresses questions such as: Once in retirement, what is the best investing strategy for the retirement money? What asset allocation should be used? What are the tax effects of certain strategies? How is the withdrawal rate a function of beginning principle?.