Is It Time to Re-Think the “4-Percent Rule?”- Season 4: Episode 12
One of the old “rules of thumb” that’s been around since the early 1990s is the idea that your portfolio has a better chance of surviving 30 years if you withdraw no more than 4 percent of the total each year. Some have said it should be even lower than that, perhaps no more than 2 percent.
But whether the amount is 4 percent, 2 percent, or some other number, the more important issue should be your actual withdrawal strategy. Are you forced to sell stocks when they’re down in order to meet your spending needs? If so, you’re asking for trouble.
In this week’s episode of Managing Your Financial Future, show host Johnny Dean speaks with our “Professor” Rick Plum, CFP®, to get Rick’s take on how the “4 percent rule” is really just a guideline, and why having a sound withdrawal strategy may be your bigger key to success.
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Rick Plum is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC. The investment professionals are affiliated with LPL Financial and are conducting business using the name Lucia Capital Group, a separate entity from LPL Financial.
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