Comments on: 4% Rule Revisited – I Want A Raise!

By: Hydrogen Bob

Hydrogen Bob — Sun, 21 Sep 2008 23:52:56 +0000

Hey asset allocators. If you have a $1M portfolio of ETFs, say 40% bonds, 60% equities, the equities yield 1.8%, the bonds 3.8%, your income yield will be about 3%. So you collect the 3%, and rebalance the portofolio liquidating 1% of it. As equities rise in vaue and dividends are incremented, you may not experience significant erosion of your portfolio over the long term.

By: Friday LinkStuff

Friday LinkStuff — Fri, 19 Sep 2008 09:03:20 +0000

[...] of Personal Finance with 4% post- hosted by [...]

By: WealthiHer Blog Network » Blog Archive » Carnival of Personal Finance at BankerGirl

Tue, 16 Sep 2008 15:28:04 +0000

[...] For Four Pillars – 4% Rule Revisited – I want a raise!� I have been interviewing financial advisors who specialize in wealth distributing strategies – [...]

By: Moments of Fame « Funny about Money

Moments of Fame « Funny about Money — Tue, 09 Sep 2008 13:35:51 +0000

[...] or eat out for lunch, probably not). Quest for Four Pillars adds to the retirement discussion with�an interesting rumination on the 4 percent rule; here, too, readers add some useful insights. If you like your cookies frosted, check out My Dollar [...]

By: Retired Syd

Retired Syd — Sun, 31 Aug 2008 06:53:27 +0000

I just posted a couple weeks ago about this very topic. According to Bengen, the safe rate to last 33 years in retirement is 4% — if you need it to last 50 years (retiring younger) you can only withdraw 3%.

Historically, there have been many 50 year periods though, where a 4% rate would have worked, but you would have been absolutely safe during any 50-year period at 3%. Whatever makes you comfortable within those guidelines . . .

By: Weekly Dividend Investing Roundup - August 30, 2008 » The Dividend Guy Blog

Weekly Dividend Investing Roundup - August 30, 2008 » The Dividend Guy Blog — Sat, 30 Aug 2008 11:04:14 +0000

[...] The 4% rule [...]

By: Shevy

Shevy — Thu, 28 Aug 2008 05:02:41 +0000

Most of this discussion is based on having your retirement money still invested in the market after you’ve retired.

But if you have that money in a safe investment (or series of safe investments) so that your principal won’t decline and you take out 4% you will be guaranteed that you can do that for at least 25 years. Depending on the rate of interest you receive, the money may last a little longer than 25 years or considerably longer. (It also depends on when in the timeline the interest rates are higher, with it being to your advantage to have high interest in the first few years, rather than having rates improve 20 years in.)

The problem with this scenario is that it depends on you retiring at 65 and only being guaranteed your income until age 90. What if you live to 100? Better hope you were getting a good interest rate! But I still think it’s better than gambling your entire retirement fund on the market and you know you won’t end up eating Alpo! (Well, not until you’re over 90 anyway.)

Note that this method does not leave your kids a big inheritance. If that’s your preference then you need a whole different strategy and a lot more money in your retirement fund.

By: Four Pillars

Four Pillars — Thu, 28 Aug 2008 00:55:51 +0000

DividendMan – that sounds like a great plan except that I’d have to work until I’m 82 before I’m in that position!

By: DividendMan

DividendMan — Wed, 27 Aug 2008 21:52:25 +0000

Boo to this. Just generate enough income to live and don’t withdraw anything. When you die, your will takes care of it!

You can’t outlive your money if you’re making enough to live off of!

By: Four Pillars

Four Pillars — Wed, 27 Aug 2008 18:16:03 +0000

CC – 3% is indeed conservative. The drawback to being more conservative is that you will have to work longer or save more or live on less in retirement (or some combination).

For any given income, you will need 33% more money in the portfolio compared to someone with a 4% withdrawal rate. This is pretty significant.

Being flexible is key.

CD – Lol – that pretty much sums it up!

The Hoss – enjoy your retirement!