American Institute for Economic Research Releases Study on Retirement Drawdown Strategies

Share Article

Study shows no single rule is right for everyone, but that behavior in the first years of retirement behavior is key.

We undertook this study to provide objective advice on the question ‘How much money can I spend during retirement?' said Stephen Adams, President of AIER.

The American Institute for Economic Research (AIER) has released a new study examining retirement drawdown strategies, moving beyond the standard 4 Percent Rule to take into account the full range of financial risks and opportunities that retirees will likely face.

The AIER analysis finds that no single rule works for everyone; that the early retirement years matter most in successful retirement finance; and that a flexible drawdown strategy leads to better retirement outcomes.

AIER’s analysis compares retirement drawdown strategies that fall into three broad categories: constant dollar (withdrawing a fixed amount of the portfolio annually), constant percentage (withdrawing a fixed percentage of the portfolio annually), and increasing percentage (adjusting the drawdown percentage upward throughout retirement). For each strategy, AIER applied initial drawdown amounts ranging from 2 percent to 7.5 percent. The Institute then examined the performance that would have resulted from actual market returns that occurred between 1928 and 2013. The goal was to determine which combination of drawdown strategy and initial withdrawal amount is best under a spectrum of investment conditions.

“Managing personal finances during retirement is one of the most challenging and confusing aspects of American life,” said Stephen Adams, President of AIER. “We undertook this study to provide objective advice on the question, ‘How much money can I spend during retirement?’ It’s important for retired people, as well as everyone who is saving for their retirement, to understand all of the variables that affect their lifestyle in retirement, from unforeseen expenses to below-average market returns. Our study shows that no one rule for withdrawals during retirement is right for everyone, and that simply reaching a dollar amount in assets before retirement isn’t necessarily the right way to approach saving either.”

More information and complimentary electronic copies of the complete analysis and a summary of the research are available on AIER’s website at Print copies of the study are available at no cost by emailing info(at)aier(dot)org.

About the American Institute for Economic Research

The American Institute for Economic Research (AIER) conducts independent, scientific, economic research to educate individuals, thereby advancing their personal interests and those of the nation. The Institute, founded in 1933, represents no fund, concentration of wealth, or other special interests. Financial support for the Institute is provided primarily by the small annual fees from several thousand sustaining members, by receipts from sales of its publications, by tax-deductible contributions, and by the earnings of its wholly owned investment advisory organization, American Investment Services, Inc. To learn more, visit

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Alex Stockham
Rubenstein Associates
+1 (646) 251-3736
Email >

Francis McGill
Rubenstein Associates
(212) 843-9353
Email >
Visit website