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Investing Specialists

In-Retirement Distributions: There's More Than One Way to Get It Done

Each method has its own pros and cons, but understanding your options is the key to implementing a successful strategy.

I recently asked readers whether their retirement-plan withdrawals were fixed or variable. A lively thread on our Discuss forum boards ensued, with retirees and pre-retirees sharing lots of sensible advice.

As I read through the comments, however, I realized that there's still a lot of confusion about this topic, and I inadvertently stoked it with the terms I referenced in my question. For starters, whether a payout is fixed and variable is really in the eye of the beholder: Taking out a fixed percentage of a portfolio per year results in varying amounts of dollars coming in the door, while taking out fixed dollar amounts will mean that a retiree's withdrawals will vary on a percentage-of-portfolio basis.