With Perpetual Withdrawal Rates, Your Money Can Last Forever

If you're nearing retirement, you might have given thought to how to spend down your nest egg so that it lasts you the remainder of your life. You may have also gone a step further -- and considered who or where your money should go to after you die.

Although slightly morbid, this is an important factor in retirement and estate planning, so it's a good idea to give it some thought. For example, do you plan to leave a significant amount of your wealth behind to your children, grandchildren, or other heirs? Maybe you want to leave your money to charity instead -- to your alma mater to fund a scholarship for underprivileged students, for instance. Or perhaps you don't mind having anything left over so long as you don't go broke during your lifetime.

If you're in the last category, the long-standing retirement rule -- that you should spend no more than the annual safe withdrawal rate -- might still be relevant to you. However, if you want to have money to leave behind for family, friends, or charity, it may be worth revising this piece of popular retirement advice.

Source Fool.com