Understanding The 4% Rule - and why it's outdated...
I think we can all agree on the following statement:
It would be useful to know exactly how much you can spend each year in retirement without running out of money. Right?
This way you wouldn’t overspend and go broke, nor would you underspend and do without the fun things many people enjoy in retirement. Like doting on your grandkids if you like them or buying a big wide-screen TV if you don’t! Would this information be useful? We think it would!
So how do you determine this number.
Well, in 1994, an economist named William Bengen created the 4% rule to answer this question...
But much has changed since then. I had more hair back then! Some of us were still using pay phones!
The reality is if you are relying on the 4% rule, you may be sabotaging your chances of having a comfortable retirement. This 4 minute video will clear things up for you!