Taggart wrote: ↑
11 Jun 2017 04:19
At least my forecasting has been pretty good as far as the money in the RRIF lasting until the age of around 95 on minimum withdrawals.
Before 2015, the age 71 and higher RRIF minimum withdrawal rates were very close
to a tweaked VPW with the following setup: internal rate 6.6%, last withdrawal age 99.5, cap of 20% on withdrawal rate.
Since 2015, the age 71 and higher RRIF minimum withdrawal rates are very close
to a tweaked VPW with the following setup: internal rate 3.3%, last withdrawal age 99.5, cap of 20% on withdrawal rate.
VPW was inspired from the age 71 and higher RRIF minimum withdrawal rates. I prefer VPW because it uses the same model prior to age 71 and it modulates its internal rate based on the portfolio's asset allocation.
The 6.6% internal rate was completely out of whack; were they expecting retired people to be invested into a 100% stock portfolio with an expected 6.6% real
Even the newer 3.3% internal rate could be considered pretty aggressive, as investors usually put their bonds and GICs into their RRSP/RRIF. The current real yield on 30-year Real Return Bonds is approximately 0.5%, 3% lower. This implies an expected loss of 3% per year in inflation-adjusted
minimal RRIF withdrawal amount after age 70.