How Retirees Can Withdraw More Than 4% Per Year

You probably know about the “4% rule.”

Studies show that retirees should be able to withdraw an inflation-adjusted 4% per year (based on their account value during their first retirement year).

But recently, I’ve warmed to something else. With this new method, a retiree’s money would have lasted more than 40 years…. even if they began on the eve of history’s biggest market crash (1928).

You might think I’m talking about withdrawing just 3% per year. But no… this goes the other way.

With a couple of simple rules (that make a lot of sense) retirees should be able to withdraw an inflation-adjusted 5% per year.

That’s a 20% income boost, compared to the 4% rule.

Image by Pixabay


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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. Sara Abu E says:

    Dear Andrew,
    It was a great pleasure meeting you in Dubai. One follow up suppose you are buying VWRD with all you life savings via InteractiveBrokers. What happens if IBKR or Vanguard goes bankrupt?

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