Some Say The 4% Rule Is On Its Last Legs. Is It?

For decades, the “4% Rule” has been a handy rule of thumb for retirees to calculate how much they should withdraw from their retirement savings each year. The rule is fairly straightforward: your withdrawal in the first year of retirement should be 4% of the total value of your retirement accounts, and every subsequent year’s withdrawal should be adjusted upward to account for inflation. 

However, stock and bond prices are still at record highs and inflation is hovering around 8.5%, which recently led William Bengen—the father of the 4% Rule—to tell the Wall Street Journal that “there’s no precedent for today’s conditions.” So is the 4% Rule on its way out?

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