The #1 retirement fear of Americans is running out of money. AARP reports that 50% of Americans share that fear.
And with good reason, because the average 65-year-old (the average retirement age in the US is 61) will outlive his or her savings by almost a decade, according to the World Economic Forum. Unfortunately, many will be forced to choose between putting food on the table or paying for life-saving medicine and may end up being dependent on their children.
We spend our working years hustling to build up our retirement nest egg. We assume that when we retire, we’ll supplement Social Security by withdrawing some of the principal. But no one can give us surefire guidance on how much we can safely take from our nest egg each year. In fact, William Sharpe, winner of the 1990 Nobel Prize in Economic Sciences, said retirement income planning is “the hardest and nastiest problem in finance.”