It is better to live rich than to die rich.

Samuel Johnson

This chapter could be called "The Facts of Life for Retirees." It gets right to the nub of some choices that cannot be avoided. There are very few financial changes as important as retirement. It's the end of paying your portfolio and the start of having your portfolio pay you. How you go about this transition will have financial repercussions for the rest of your life—and most likely for your heirs after you are gone.

You may have saved for many years and invested your money carefully. But when the money has to flow in the reverse direction, suddenly you face four major decisions that will determine the bulk of your financial future.

  1. How will you invest your money?

  2. How much risk will you take?

  3. How much do you need or want regularly from your portfolio?

  4. Do you need a fixed income or can you tolerate a variable income?

The first two questions are related, and they're addressed in detail in Chapters 6 through 9. We discussed the third question in Chapter 5. I repeat those questions here because the answers may be different for retirees than for pre-retirees. Thus, those topics may be worth revisiting.

This chapter is concerned with the fourth question and the implications of various possible answers to it.

The biggest financial risk retirees face is running out of money before they run out of life. How you structure your withdrawals plays a major role in this. This topic ...

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