Forget the 4% Rule -- Here's What You Should Really Be Looking at During Retirement
The 4% rule for withdrawing money from a retirement account makes sense for most people ... even if only as a starting point for planning purposes. According to the rule, by withdrawing 4% of your retirement account's balance in your first year of retirement and then only increasing your annual withdrawal by the previous year's rate of inflation, your money should last at least three decades. That's more than enough time for the typical retiree.
This popular strategy, however, isn't the only detail regarding a retirement portfolio that retirees should be thinking about. It's not even the most important one. Here are four other considerations that will help you get a better handle on fully funding your golden years.
The 4% rule presumes any withdrawals from the retirement fund will be necessary to cover your expenses, but that's not always the case. You may only need to withdraw 3% of your retirement account's value in your first year of retirement to live on. If that's the case, the smart-money move is to leave that last 1% invested and allowing it to continue producing growth.
Source Fool.com
