Safe Withdrawal Rate Myths: Debunking 3 Common 4% Rule Mistakes
- Safe Withdrawal Rate Myths: Debunking 3 Common 4% Rule Mistakes James Conole, CFP® 20:00
The 4% rule helps us understand how much we can safely take out of our portfolio each year without running out of Money in Retirement.
Yet, as simple as the 4 percent rule seems, the practical implications are drastically misunderstood. I explore the three common mistakes people make when applying this rule and how to avoid them.
Questions Answered:
How do RMDs impact the 4 percent rule?
Does the 4 percent rule account for changes in expenses and income sources?
Timestamps:
0:00 – Questions from listeners
1:26 – Misconception 1 – RMD
3:27 – 4% rule applies to portfolio
5:51 – Assumption of 30 years retirement
7:51 – Misconception 2 – annuity distributions
10:01 – An example
12:33 – Misconception 3 – static cash flow
13:42 – Examples of changes
17:44 – Summary
Create Your Custom Strategy ⬇️
