Don't Be Afraid to Tap Capital in Retirement
Taking a controlled dip into your nest egg for retirement income is preferable to chasing high-yield securities, says professor Meir Statman.
Christine Benz: You spoke today at the Financial Behavior and Retirement Summit, and you talked a little bit about behavioral traps for retirees, and one other big ones is getting hung up on getting current income from a portfolio versus dipping into principal, if you need to. Let's talk about that one.
Meir Statman: Well, don't dip into capital is a rule we all know, and we all in a way follow. Now don't dip into capital is a wonderful rule for people during their working years, because this means that they draw very little from their portfolio and they accumulate that capital.