Document Type


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Finance and Financial Management


Popular convention is to initially withdraw approximately 4% of the retirement savings and increase that dollar amount each year by inflation. But, what if 4% isn't enough? How long will retirement funds last if a newly retired person needs 5%, 6%, or even 10%? Modern Portfolio Theory (MPT) suggests that an investor only needs to choose between 2 assets, the risk free rate and an optimal risky portfolio. In this research, five U.S.-based assets are tracked from 1934 until 2015 to see how long they survived independently and in combination with one other asset. Obviously the more a person needs to withdraw from retirement assets, the more quickly the assets are depleted. This paper shows just how fast (or slow) that happens. The risk of the portfolios is also assessed and addressed.

Streaming Media

Welch - Notes - How Long will Savings Last.pdf (200 kB)
Notes for How long does savings last when retirees need more money (or less) than conventional wisdom suggests?

Welch 1-2 Asset Summary.xlsx (301 kB)
Asset Summary Data