\u201cThe good news is: we\u2019re living longer. The bad news is: we\u2019re living longer,\u201d says Tina Di Vito, director of retirement solutions at Bank of Montreal in Toronto.
In fact, a 65-year-old couple has a one in four chance of at least one partner reaching 97 years of age. \u201cWe have to start being more realistic with our clients,\u201d she says. \u201cThe money has to last 20 or 30 years. And the impact of even the nominal inflation we have experienced recently can cut a portfolio\u2019s purchasing power in half over 20 to 25 years.\u201d
Di Vito runs through a few scenarios to show how savings can be eroded. In her example, the client has a $300,000 RRIF earning a 6% return. (Inflation is ignored in these calculations but would worsen the situation.) The results are:
> Scenario No. 1: <\/b> withdrawing $20,000 pre-taxes a year from age 55 to age 90 leaves your client with $61,757 at age 90.
> Scenario No. 2: <\/b> delaying withdrawal by five years, then withdrawing $20,000 pre-taxes a year from age 60 to age 90 will leave your client with $130,395 at age 90.
Scenario No. 3: <\/b> withdrawing $25,000 pre-taxes a year from age 55 to 64 and reducing withdrawals to $20,000 a year from age 65 onward will result in the client\u2019s money running out by age 81.
> Scenario No. 4: <\/b> withdrawing $30,000 a year from age 55 to 64, then reducing withdrawals to $20,000 a year will result in the money running out by age 74.
\t\u2014 MARY TERESA BITTI<\/b>
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\u201cThe good news is: we\u2019re living longer. The bad news is: we\u2019re living longer,\u201d says Tina Di Vito, director of retirement solutions at Bank of Montreal in Toronto.In fact, a 65-year-old couple has a one in four chance of at least one partner reaching 97 years of age. \u201cWe have to start being more realistic […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3013,3018],"tags":[],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/328851"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=328851"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/328851\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=328851"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=328851"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=328851"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=328851"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}