Your Retirement Scorecard (CBS Moneywatch)

>Continuing our look at how to assess your future retirement income, let's turn our attention to "managed payouts," which are one of three ways to generate a paycheck from what you have stashed away. (For more background on these methods, you may want to review my recent post, "My four favorite ways to generate retirement income.")

Financial planners and writers will often tell you something along these lines: If you invest in a portfolio balanced between stocks and bonds, withdraw four percent each year for retirement income, and give yourself an annual raise to account for inflation, there's a roughly 90 percent chance that your money will last for at least 30 years. Hence, the justification for the so-called four percent rule.

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Method #2: Managed payouts

The four percent rule is actually a good starting point for considering an appropriate withdrawal rate. But if you fall into one of the following two categories, you might want to consider withdrawing amounts of lower than four percent:

-- If your retirement investments are actively managed and incur investment expenses of more than 50 basis points (0.50 percent), over the long run you may fall short of the net rates of return that justify the four percent rule.

-- If you're married, both you and your spouse are healthy, and you retire in your early to mid sixties, there's a good chance that one of you will live for more than 30 years.

If either of these statements applies to you, you may want to consider payout rates on your retirement income of 3 or 3.5 percent.

On the other hand, you might consider higher a withdrawal rate if you're willing to accept some chance of running out of money before you die, or if you're willing to curb your withdrawals down the road if your investments sour.  In short, setting the appropriate withdrawal rate is both art and science.

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