A recent Barron’s article entitled Rethinking Retirement Rules called into question the commonly accepted standard for estimating the maximum withdrawal rate for a prudently managed retirement portfolio (Kapadia, 2018). In our podcast we discuss and challenge the idea that a 4.5% spending rate should be applied consistently over an extended period of time.

In this podcast you will learn:

· What is the 4% rule and how does it impact retirement?

· How the maximum portfolio withdrawal rate varies in different market environments

· What happens if you experience below average returns early in your retirement

· Why and how to allow for an additional margin of safety to counteract a ‘bad luck scenario’

Sources

Kapadia, Reshma. (2018, June 2nd) Rethinking Retirement Rules. Retrieved from https://www.barrons.com/articles/rethinking-retirement-rules-1527898022