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For example, if you want to withdraw $50,000 your first year of retirement, you’d need to save $1.25 million ($50,000 x 25) to follow the 4% rule. Why is the 4% rule outdated?
For example, consider using the 4% rule to find a baseline number. Each year, calculate what that baseline withdrawal will represent as a percentage of your portfolio value at the time.
There's more to making your money last in retirement than pre-established withdrawal amounts. Forget the 4% Rule -- Here's What You Should Really Be Looking at During Retirement Skip to main content
The 4% rule was developed in the 1990s by financial advisor William Bengen. ... let's imagine you have $1 million in retirement savings. ... A $42,024 withdrawal would be exactly 3% of the $1.4 ...
The 4% rule has long been synonymous with retirement spending. The so-called rule of thumb states that retirees can safely withdraw 4% of their retirement savings during their first year of ...
The rule was later further popularized by the Trinity study (1998), based on the same data and similar analysis. Bengen later called this rate the SAFEMAX rate, for "the maximum 'safe' historical withdrawal rate", [3] and later revised it to 4.5% if tax-free and 4.1% for taxable. [4] In low-inflation economic environments the rate may even be ...