Fees and Retiree Withdrawal

I’m often asked this question too. If I can only take 4% from my portfolio, how does your fees effect that? Does it leave only 3% for me?

Michael Kitces does an excellent job explaining this. Yes there is an effect, but bottom line from his research is that the effect is 40% of the total fee. Thus a 1% fee reduces the withdrawal rate from 4% to 3.6% (40% of 1 is .4).

I incorporate the effect of fees within withdrawal calculations for both pre- and post-retirement.

There’s an even greater impact on how much you have left to spend … it is called taxes! Your tax bracket percentage is much larger than the fee percentage.

Fees and Retiree Withdrawal | AdviceIQ.

About Larry Frank, Sr.

Larry R Frank Sr., MBA, CFP®, is an experienced financial advisor and a published author on Retirement Planning Research. Have a financial question? Click Here to Ask Larry

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