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I have stuck on several IPS ability of taking risk. One Question for 50 year old retirees (2007 exam).The nominal required return is 7.5% and liquidity need of 5% per year. No matter how rich the guy is, I would say the ability to assume risk is average. But answer is above average. The reasons given include he can go back to work. Required spending need of 5% (not even considering inflation) is low compared to assert. Etc.
Is 5% outflow really low?

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