The old 4% rule over simplified what really happens during retirement … what’s that? You age! Aging has a dramatic effect on what draw down rate you may use … in fact, besides market returns sequences* (good or bad), time is the second most important factor in retirement.
My article below, based on our latest research (referenced in the article) demonstrates that the 4% rule really only applies to early retirement years (60 and younger – but younger is actually less than 4% since there is more time required for draw downs from a portfolio – and that’s another future possible article).
This article discusses normal draw down rates for various ages from 60 to 100.
*How markets are dealt with is the subject of my next article.