This Common Spending Habit Could Potentially Ruin Your Retirement
When you're planning for retirement, the bulk of the work is centered around saving during the years leading up to when you retire. Many people, then, think that everything will be smooth sailing once they finally leave their job.
However, it's equally important to consider how you'll spend your money once you retire. Because no matter how much planning you put into saving, if you spend too much each year in retirement, you'll run out of money sooner than you expected.
Even among those who do have a withdrawal strategy to ensure they're not overspending in retirement, that strategy may be based on a flawed assumption. One of the most popular guidelines for determining how much you can withdraw each year in retirement is the 4% rule, which states that you can withdraw 4% of your nest egg the first year of retirement, then adjust that number each subsequent year for inflation.
Source Fool.com
