Why It's Time to Rethink This Common Retirement Advice
As people move through their careers, it's common for them to wonder how much they'll need for retirement. There's no one-amount-fits-all answer, but luckily, there are rules of thumb people have traditionally followed: The 80% rule and the 4% rule.
The 80% rule deals with how much you'll need annually, advising people to have 80% of their pre-retirement yearly income in retirement to maintain their lifestyle. If you plan to downgrade your lifestyle, you can lower the percentage, and vice versa.
The thought behind the 4% rule is that retirees could plan to withdraw 4% of their retirement savings yearly for 30 years, adjusting for inflation, without outliving their savings. Unfortunately, it may be time to rethink the 4% rule due to the current economic conditions. Here's why.
Source Fool.com
