An optimal withdrawal strategy beginning at age 65 provides a lifetime income from a portfolio, adjusted annually for inflation, while reducing the probability of living in financial ruin to an ac-ceptable level. This paper analyzes the probability of living in financial ruin, potentially for multiple years, rather than just the event of ruin. A stochastic Excel model was developed to simulate the effect of varying investment returns on a portfolio with two asset classes; large company stocks

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... d long-term government bonds. A stochastic model is also applied to retiree mortality. The following variables were analyzed to determine their relative impact on withdrawal strategies: • Withdrawing a constant percentage of the portfolio, • Gender, • Initial asset allocation, • Asset allocation rebalancing methods, and • Low investment return environments. For both genders and most withdrawal rates, an approximately equal initial asset allocation of stocks and bonds, combined with a level rebalancing function, provided the lowest probability of living in financial ruin. Because each investment return followed its own probability distribution function, some retirees experienced financial ruin even in the most conservative simulations.