Pick a number. But not just any number. Whatever you do make sure it's the right number. Pick too high a number and odds are that you will outlive your money. In fact, the higher the number the faster you run out. Pick a low number and odds increase, dramatically, that you won't outlive your money. But you also might find yourself on a tighter budget than need be.

But what is the number? How much should you withdraw from your various investment accounts during retirement? A bevy of financial experts and institutions are now lecturing Americans (as well building products and services) about what they call the drawdown strategy -- what percent of money should retirees withdraw per year to make their money last as long as they do.

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"Managing your assets as you roll into retirement is a lot different than it used to be," says Bob Carlson, author of "The New Rules of Retirement" and editor of the newsletter Retirement Watch. "The days of rolling all your assets into bonds or CDs are over," says Carlson in his latest newsletter.

By way of background, Carlson says traditional retirement or financial plans often make a number of simple assumptions. Plans assume that at retirement the retiree will begin withdrawing either a fixed percentage of the portfolio or a fixed dollar amount, adjusted for inflation each year.

"That was a fine approach when retirement lasted five to 10 years and most expenses were paid by former employers or the government," he writes. But now that traditional approach isn't good enough. Follow it and there is a good chance of outliving your resources, he says.

In the main, most experts now say retirees should withdraw no more than 4 percent or 5 percent per year from their investment accounts. But as with all things financial, there is plenty of debate as well as plenty of exceptions to the rules.

For instance, Stuart Lucas, author of "Wealth" and chairman of Wealth Strategists Network in Chicago, is at one end of the spectrum. He says retirees should "spend" no more than a meager 3 percent, after taxes no less, from their investment accounts. "Spending anything more than 3 percent of one's retirement portfolio is not prudent if you want your money to last," he says.

The reasons? One, Americans are underestimating how long they might live in retirement and, two, they are overestimating what sort of returns they will get on their investments. For instance, he says a married couple age 65 will have to face this fact: There's a one in four chance that one of them will live another 32 years. "That means one of them will have to live one-third of their lives off unearned income," he says. "And that's a very long time."

The case for pessimism

Americans also tend to think of investment returns in historic terms. Americans, financial columnists included, tend to note that large-company stocks gained on average 10.36 percent from 1926 to 2005, according to Ibbotson Associates 2006 Yearbook, while long-term government bonds have returned on average 5.47 percent over the same time. But Carlson and other say the real obstacle to a long-lasting nest egg is outside the retiree's control.

"That obstacle is the sequence or pattern of investment returns during retirement," Carlson says. "It is easy to use history to estimate that the average annual long-term return from a particular portfolio is 8 percent, 10 percent, or something else. But the markets do not deliver straight line returns."

What's more, Lucas says it's likely the stock and bond markets will return far less than the historically averages over the next few years. And that could spell trouble for retirees who spend more than 3 percent from their investment accounts earmarked for retirement spending.

"People's expectation for how assets will perform and the reality of how they will perform are mismatched," he says. "People are more optimistic than they should be. And the important takeaway when thinking about a drawdown strategy is this: It's harder to maintain wealth once you have it, than to make it. People often make their wealth doing something else. And to keep your wealth you have to be smart for decades and luck tends to run out when you operate over the span of time."

Of note, Lucas says retirees should withdraw money from their investment accounts in the most tax-efficient way possible, which at the moment would mean using Roth IRAs, investments that produce capital gains and qualified dividend income rather than investments and accounts that produce ordinary income. For his part, Lucas says retirees should focus less on the gross percentage they withdraw from their accounts and more on the after-tax amount.

Carlson, meanwhile, takes a slightly different approach to 'the number.' He says withdrawing no more than 4 percent to 5 percent of the portfolio the first year, and then adjusting that dollar amount for inflation each year, is not an ideal solution. With that approach, he says retirees would underspend and deprive themselves, especially if they retire at the start of a severe bear market.

His solutions to the nest-egg dilemma? Flexible spending, he says, is in. In fact, he says flexibility is needed both for income and spending. He says the flexible approach is a relatively simple calculation, though it is more involved than a simple percentage.

First, he says, decide the target spending percentage of your portfolio. Studies say that target should be 4 percent to 5 percent of the beginning value the first year. Then, divide your annual distribution into two portions. The first portion is last year's spending plus whatever inflation was for the last year. Multiply this by 70 percent. The other portion is your target distribution rate from the fund. Multiply this by 30 percent. Add the two numbers, and that is your distribution for the year.

Example: Suppose you have a $500,000 retirement fund, set a 5 percent spending rule, your spending was $25,000 last year, and inflation was 2 percent. Here's how you do the calculations. Last year's spending plus inflation is $25,500. Multiplied by 70 percent, that is $17,850. Five percent of your fund is $25,000. Take 30 percent of that to get $7,500. Add the two results, and you will take $25,350 from the fund this year.

Suppose the portfolio declines to $480,000 next year and inflation again is 2 percent. One bucket of your spending will be $25,350 increased by 2 percent, or $25,857. Take 70 percent of that to get $18,100. The other bucket is 5 percent of the fund, or $24,000. Take 30 percent of that, or $7,200. Add the two and your spending is $25,300. You will have a small spending reduction to recognize the reduced value of your portfolio. Under a fixed 5 percent plus inflation rule, you would have spent $25,500 the first year and $26,010 the second year.

The key to making such a system work, Carlson said, is that a portion of annual spending must also be flexible. For instance, the retiree must minimize fixed expenses such as mortgages and car payments so that variable expenses such as travel, dining out and recreation can be trimmed when the portfolio declines.

And instead of filling a portfolio with risky assets that give the highest long-term returns, he recommends using assets that provide steadier returns with less volatility. With this investment approach, Carlson says retirees will avoid the worst losses of a bear market.

"You also are likely to get long-term returns as high as or higher than those of the riskier portfolios," Carlson says. "The key to making your nest egg last a long time is to avoid large losses."

The case for case-by-case numbers

Others, meanwhile, say Americans need to focus less on the rule-of-thumb withdrawal number and more on their individual circumstances. John Marcante, a principal with Vanguard Group and leader of Vanguard's just-launched Advice Services, says retirees should examine their cash flow needs and then examine how well their own portfolio would have performed, both in terms of growth and in terms of providing the necessary cash flow on an inflation-adjusted basis, in thousands of scenarios until they become comfortable with their plan.

And Gregory Reed, director of planning at Smith, Frank & Partners in Dallas and co-author of "Countdown: Will You Run Out of Money Before You Run Out of Time?" says the first order of business is to determine the desired level of lifestyle expenses a person would like in retirement. Then the retiree needs to identify what he calls the 'staying rich' number.

"That's the amount of money that would be required under conservative assumptions to achieve a high level of confidence in never running out of money. Once this amount has been identified a plan is constructed with the specific goal of achieving that level of assets," he said.

"We do not believe that there is a 'one size fits all' solution for withdrawal rates, says Reed. "Each person's goals and objectives dictate a unique recommendation."

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