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Ep. 193 | Is the 4% Rule Still Valid for Retirement?
Manage episode 426779716 series 3266302
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In this episode, we delve into the widely debated 4% rule for retirement withdrawals and question whether it remains a reliable strategy in today's economic climate. Originating from William Bengen's research in the 1990s, the 4% rule has long been considered the gold standard for retirees aiming to ensure their savings last. However, with changing market conditions and evolving financial insights, many are re-evaluating its effectiveness.
We explore the origins of the 4% rule, its historical performance, and why it became so popular among financial planners and retirees. We also discuss the criticisms and limitations of this approach, considering lower bond yields and increased market volatility. Is a fixed 4% withdrawal rate still the safest bet, or do we need more flexible strategies?
Join us as we discuss various perspectives, including Dave Ramsey's controversial 8% withdrawal rate and the potential of higher rates like 5% or 6%. We also cover the importance of adjusting for inflation to maintain purchasing power and ensure a sustainable income throughout retirement.
Whether you're planning for retirement or advising others on their financial future, this episode provides valuable insights into making your money last. Don't miss out on this crucial conversation about the future of retirement planning and withdrawal strategies.
Previous Video: Living Off Your Nest Egg: https://youtu.be/PDrv7NdI9FA?feature=shared
Articles:
https://www.britannica.com/money/4-percent-rule-retirement
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