Retirement Portfolio Survival Guide

This table shows the survivability of five different hypothetical retirement portfolios over the 20 year period ended December 31st 2018.

The results of the five portfolio risk levels illustrated range from very conservative to aggressive.

All five portfolios assume the retiree withdrew 5% of the portfolio annually, and increased annually withdrawals by 3% to keep up with inflation.

Three different starting balances are shown — $250,000, $500,00 and $1 million.

What stands out is that the most diversified portfolio outperformed considerably — diversification worked!

The diversified portfolio was invested across 12 different types of investments in equal amounts of 8.33% and it was re-balanced at the start of each year to maintain the equal allocations of 8.33% in each type of investment.