Will 2000-Era Retirees Experience the Worst Retirement Outcomes in U.S. History? A Progress Report after 10 Years

22 Pages Posted: 30 Nov 2010

See all articles by Wade D. Pfau

Wade D. Pfau

The American College for Financial Services; Retirement Researcher

Date Written: November 29, 2010

Abstract

We find evidence that retirees in 2000, in particular, are on course to potentially experience the worst retirement outcomes of any retiree since 1926. This holds for a wide variety of asset allocations and withdrawal rate strategies. Wealth depletion is taking place more rapidly for 2000-era retirees than for retirees who even endured the Great Depression or the stagflation of the 1970s. Though moderate inflation during the past decade has resulted in current withdrawal rates that are a bit less for the 2000 retiree than for some retirees in the 1960s, this is hardly reassuring with further analysis based on the required future asset returns needed for sustainability. Our findings cast doubt as to whether the 4 percent withdrawal rate rule will be sustainable for turn-of-the-century retirees.

Keywords: retirement planning, safe withdrawal rates, sequence of returns risk, retirement ruin, retiring in 2000, current withdrawal rate

JEL Classification: C20, D14, G11, G17, N22

Suggested Citation

Pfau, Wade D., Will 2000-Era Retirees Experience the Worst Retirement Outcomes in U.S. History? A Progress Report after 10 Years (November 29, 2010). Available at SSRN: https://ssrn.com/abstract=1717283 or http://dx.doi.org/10.2139/ssrn.1717283

Wade D. Pfau (Contact Author)

The American College for Financial Services ( email )

630 Allendale Rd
King of Prussia, PA 19406
United States

HOME PAGE: http://www.retirementresearcher.com

Retirement Researcher ( email )

1900 Gallows Rd, Suite 350
Vienna, VA 22182
United States

HOME PAGE: http://www.retirementresearcher.com

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