In the article by Carson C Chow linked by "The mathematics of dollar cost averaging" it is explained that investing a fixed amount of money each time period gives a lower expected cost per stock than if you purchase a fixed number of stocks each time period.

Is there a similar result for withdrawing money from the market when I retire? Something like: you should sell a fixed number of stocks each time period (even if that gives you more cash or less cash than you need)?

  • 2
    Rebalancing and asset allocation would be the terms I'd suggest researching as there are approaches here.
    – JB King
    Commented Apr 17, 2014 at 19:15

1 Answer 1


When you are a certain age you will be able to tap into your retirement accounts, or start receiving pension and social security funds. In addition you may be faced with required minimum distributions from these accounts.

But even before you get to those points you will generally shift the focus of new funds into the retirement account to be more conservative. Depending on the balances in the various accounts and the size of the pension and social security accounts you may even move invested funds from aggressive to conservative investments. The proper proportion of the many different types of investments and revenue streams is open to much debate.

During retirement you will be pulling money out of retirement accounts either to support your standard of living or to meet the required minimum distributions. What to sell will be based on either the tax implications or the required distributions that will still maintain the asset allocation you desire.

If your distributions are driven by the law you will be selling enough to meet a specific required $ figure. You will either spend that money or move it into a low interest savings account or a non-retirement investment account.

If trying to meet your standard of living expectations you will be selling funds that allow you to keep your desired asset allocation but still have enough to live on. Again you will be trying to meet a specific $ figure.

Of course you may decide at anytime in retirement to rebalance based on changes to your lifestyle, family obligations, or winning the lottery.

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