Faculty Publications


Should You Lower Your Distributions If Your Portfolio Underperforms The Stock Market?

Document Type


Publication Date



Changing directions, another optimistic assumption of classic safe withdrawal rate studies is that retirees are able to earn precisely the underlying index returns net of the risks. Three truths dispute that idea:

Actively managed funds do not precisely match the underlying benchmarks, Many investors may make behavioral and timing mistakes of buying high and selling low, and Investing costs that reduce returns below the benchmark levels.