What percentage of your portfolio can you spend each year, on retirement?

William Bernstein states with impressive historical evidence, that if you want your retirement money to last as long as you will (and you might live a lot longer than you think) then you shouldn’t plan on withdrawing more than 4% per year.
He discusses this in his book, The Four Pillars of Investing, on pages 229-240.  Financial advisors purporting that you can withdraw up to 8% per year don’t know what they’re talking about.  If you tried this stunt in 1965, you would have been dumpster diving by 1977.
I like to call it “the 4% rule” and I plan my future investment withdrawals accordingly.
One of my favorite blogs outlining this with further academic support is this one:  Bylo Selhi

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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1 Response

  1. Jason says:


    I’m a 36 year old hardcore couch potato! When I’m ready to hang up the international teaching life style (no US SS), what’s your opinion on shifting my portfolio to a Vanguard Managed Payout Fund vs managing it myself with a 60%-40% spilt and following the 4% rule?



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