Quote Of The Week: Break This Retirement Rule And You’ll Be Eating Alpo

You’ve probably heard of the 4% withdrawal rule, right?

Based on research, most financial planners and retirement experts think you can withdraw roughly 4% of the value of your portfolio each year and spend it. Withdraw more, and you risk running out of money before you run out of life. (We use a modified 4% rule in our practice, with a few special bells and whistles).

Here’s a great quote by William Bernstein, long-time financial planner, writer, money manager, and expert retirement researcher about why you should follow the 4% rule.

Bernstein was interviewed recently in the Wall Street Journal for advice on how to ace the retirement income challenge. Not one to mince words, here’s what he said:

William Bernstein, the author of several books about investing, puts it this way: “Two percent is bulletproof, 3% is probably safe, 4% is pushing it, and at 5%, you’re eating Alpo in your old age.”

The Takeaway: Want to learn more about setting up a retirement income flow when you stop working?

Read our previous articles on When It Comes To Retirement Income, Less Than 1 Out Of 4 Gets It Right and Is The 4% Rule Dead?

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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