2 ms·
The problem is that a rule of thumb is about averages, not edge cases. For a really long retirement, you are going to hit a lot of edge cases. The 4% rule was
by typest 5y ago
The problem is that a rule of thumb is about averages, not edge cases. For a really long retirement, you are going to hit a lot of edge cases.
The 4% rule was based off the Trinity study, which looked at 30 year retirements and assumed the retiree would deplete their principal. It is not a safe basis for a long retirement.
- buzzy_hacker 5y ago“ Notably, it appears that the safe withdrawal rate does not decline further as the time horizon extends beyond 40-45 years (given the limited research available); the 3.5% effectively forms a safe withdrawal rate floor, at least given the (US) data we have available.” https://www.kitces.com/blog/adjusting-safe-withdrawal-rates-to-the-retirees-time-horizon/ https://www.kitces.com/blog/adjusting-safe-withdrawal-rates-...