Why Withdraw 4% in Retirement When the Market Averages More?

“Then there is the man who drowned crossing a stream with an average depth of six inches.” –W.I.E. Gates The standard financial planner advice when it comes to how much you can spend in retirement is 4% of your nest egg when you retire, adjusted annually for inflation. Actually, the more accurate safe withdrawal rate […]

Revisiting SAFEMAX

“Retirement is just a nice way for the company to tell you that they have found more talented, youthful and skilled staff than you.” –Unknown Back in 1994, William Bengen came out with a seminal study evaluating just how much people could withdraw each year in retirement and not run out of money before they […]

Why the 4% Safe Withdrawal Rate Doesn’t Make Sense

This article has incorrect information in it. On purpose. Read it, see if you can find the flaw, and then read “Beware the Rules of Thumb” to find out why I put the flaw in there! “I’m spending a year dead for tax reasons.” –Douglas Adams I was recently on my way back to Fort […]

Is 4% the Correct Safe Withdrawal Rate at Retirement?

“I’ve got all the money I’ll ever need if I die by four o’clock this afternoon.” –Henny Youngman Since William Bengen’s authoritative study of the subject, the rule of thumb for a safe withdrawal rate in retirement has been 4% of assets. Oftentimes, such as in the textbook for my financial planning class, it is […]