Why the 4% Withdrawal Rule Is Wrong
What if I told you one of the most common guidelines people use to plan for retirement is wrong? Further, what if I told you that making the mistake of following it can greatly impact the quality of life you live in retirement and the longevity of your savings?
Well, here goes.
More than 40 years ago, financial adviser William Bengen developed what is known as the "4% withdrawal rule." This rule of thumb states you can withdraw 4% of your portfolio in the first year of retirement, adjust the amount withdrawn each year for inflation and safely avoid running out of money over
