Required minimum distributions, or RMDs, are an important aspect of planning for retirement that can affect your retirement income strategy. Understanding and estimating your RMD can help you create a retirement income plan before you are even required to take your first withdrawal.
With the increase in interest rates start the year and the relatively low yields offered by bonds, some investors are questioning their need to hold bonds. However, in May we saw another example of why it’s important to maintain a high quality bond allocation in a portfolio.
Deciding how much of your pre-retirement income is needed to sustain your current lifestyle during retirement can help you prepare for a better retirement outcome. Planning for your new sources of income and differing expenses in retirement is key. This month, Dimensional Fund Advisors explains replacement rates, how they change with increased income, and how to use them to plan for your retirement.
With the 10 year Treasury yield hitting 3% in April during a steady increase in interest rates to start 2018, we believe taking a look at several common misconceptions investors have with fixed income would be helpful.