In this recent article on Yahoo finance provided by The Street, Stan Luxenberg examines the issues and the challenges of withdrawing from a retirement portfolio in a bear market. One of the concerns with Wall Street’s solution for retirement is it creates a lot of uncertainty for retirees.

The financial planning community always warns folks that past performance is no guarantee of future results, yet we base our future performance expectations for withdrawing money from portfolios, in part, based on what has happened in the past. We dress up past performance with fancy tools like Monte Carlo Analyses that help us with range of return expectations and the sequence of returns, but ultimately most of the programs I’ve seen use past performance of asset classes for determining future results. 

If you are like me, you probably would not want a pay decrease in retirement due to a market correction. In my book, I remind people that retirement is all about cash flow not net worth.

Be sure to implement a plan with a focus on cash flow from guaranteed sources so you don’t have to let a bear market dictate your lifestyle in retirement.