The 4% “Safe Withdrawal” Rule

The 4% rule is often cited as the “safe” amount one may withdraw annually from their portfolio in retirement. The rule is meant to mitigate the risk of outliving your money. While it may be a sound mathematical theory, it’s not one I’ve ever had anyone get excited about.

 The individuals and couples I work with would like to plan for regular spending PLUS large and small trips, car and truck purchases every few years, gift giving, and have cushion for unforeseen expenses or opportunities. They would like to factor in remodel projects, selling property, buying boats and RVs, affording an enjoyable retirement. Since these plans require cash flow flexibility, living off a fixed amount of income that only adjusts for inflation would make for a stale retirement in comparison. We plan for all the above by including appropriate withdrawals adjusted for inflation, built to match your grand vision for your golden retirement years. With more advanced techniques, we can still model how long your nest egg is projected to last with asymmetric withdrawals, creating the spending plan around your life expectancy. It’s refreshing for most to see that there are more flexible options than the stale old 4% safe withdrawal theory. 

LouAnn Schulfer of Schulfer & Associates, LLC Wealth Management can be reached at (715) 343-9600 or louann.schulfer@lpl.com TheWealthInformationLady.com SchulferAndAssociates.com 

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