For those in retirement, we offer advice on how much you can safely withdraw each month. Learn more about what you can expect when using your Betterment account for income in retirement.
The “Monthly Safe Withdrawal” recommended amount on the Advice Tab for retirement income goals is based on our retirement income model that assumes you update your withdrawal amount and allocation at least annually according to our recommendations, and that your age and lifetime horizon are correct. The recommendations will vary based on market performance, your cashflows and allocation changes. If you follow this advice, updating at least annually, we estimate that there is a 4% or less chance of depleting your portfolio before the end of your designated time horizon.
This is based on our research which uses Monte Carlo simulation. This means that test results are hypothetical and based on a specific set of assumptions. Withdrawal amounts are not guaranteed income. You should consider all of your sources of income both guaranteed and variable, as well as your expected cost of living, to make a cohesive income plan.
You can read more in our article about retirement income.
Retirement Income is a service that comes at no additional cost for our qualified retired customers. Customers will simply need to set their goal to be a "Retirement Income" goal and set their withdrawal amount accordingly. You can choose the goal type on your advice page. This process is very similar to when you create auto-deposits in your account.