Someone asked us this past week if we would explain what the “Four Percent” rule is and how it came about. The Four Percent rule is based on a study by a financial advisor named William Bengen. His study suggested that one could safely withdraw 4% of their starting portfolio value for 30 years without running out of money. The rule was later popularized by a 1998 study based on the same data and a similar analysis. Both studies conclude what “the maximum ‘safe’ historical withdrawal rate” is. Call us if you have any questions about how to apply this
There was an interesting article the other day in the Wall Street Journal. The article discussed a recent survey of workers in their 60’s who were asked about their retirement preferences. The author found that the assumptions that are usually embedded in retirement income calculators–for example, good health, not wanting to make a bequest, and claiming social security as soon as you retire–fit only 4% of people. This is important to think about because it highlights that it’s going to be up to you as an individual to factor in your own preferences and needs as you think about the
“Money can’t buy happiness” is an adage that some people live by, and others ignore. According to a recent Purdue study: “income can correlate with emotional well-being and life satisfaction.” But, as a recent GoBankingRates article tells us, the price of happiness differs (apparently) depending on the State you live in. We may have some ideas on how to continue to have an income you can’t outlive post-retirement, which might just contribute to your happiness. Reach out to us. We’re always here to help. Read the GoBankingRates article.