Why can it be beneficial to raise or lower the withdrawal rate in response to market...

Why can it be beneficial to raise or lower the withdrawal rate in response to market fluctuations?

Expert Solution

It can be beneficial to raise or lower the withdrawal rate in response to the fluctuations in the market because it will help us to synchronize our withdrawals in respect to the market changes and it will be helpful in managing with the adverse economic situations as well because when the market will be getting into a adverse Zone, we will be cutting out on our withdrawals to a large extent and it will protect us with proactive planning because synchronisation of the withdrawal rate in respect to the market will help us in eliminating the risk associated with the Macro environment with large extent.

Hence, withdrawal rate should be synchronised with that of the market fluctuations according market fluctuations will be guiding the individuals in order to variable adjust his withdrawals and respect to the overall underlying market conditions and it will help him in eliminating the risk associated with fluctuations and adversity in the market conditions.

jeff jeffy answered 2 years ago

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