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Financial Independence: Target Percentage Adjustment
By Investment Moats  •  February 14, 2015
In  a continuation to my piece on variable withdrawal decisions for financial independence, I discovered this video presentation by David Zolt, the financial planner who came up with the Target Percentage Adjustment (TPA). It gives us a better idea the extend of the performance of the TPA + 3. As a quick recap, wealth de-accumulation have its own complexity versus wealth accumulation:
  • A fixed 4% safe withdrawal rate based on a 50/50 equity and bond portfolio with rising inflation may not work very well in other countries, but also in a low yield environment, where future bond portion will not yield as well
  • By not working well, we mean that you will outlive your portfolio, when your portfolio is subjected to major stock market downturn and sequence of return risk
  • TPA is a flexible way  of withdrawal in that, you do not increase withdrawal based on inflation when the ...
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By Investment Moats
Investment Moats is set up by Kyith Ng and have been around since 2005. He aims to share his experiences making sense of money, how money works and ways to grow his money. It hopes that by sharing his experiences, both good and bad, season investors can advice and critique his decisions and new investors can learn from them and find their own style ...
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