4% Rule Is Based on Faulty Assumptions, New Paper Argues

October 12, 2022 by John Manganaro

The 4% withdrawal rule is one of the most broadly cited retirement planning rules of thumb discussed by retirement advisors and their clients.

Defined basically, the rule suggests a given client in retirement should add up all of their investments and simply plan to withdraw 4% of their total wealth during their first year of retirement. The withdrawal amount is then adjusted annually to account for inflation.

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Originally Posted at ThinkAdvisor on October 4, 2022 by John Manganaro.