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Is the 4% Rule for Retirement Still Valid?

4% Rule for RetirementConventional wisdom says it’s safe to rely on income from your brokerage account during retirement. In fact, many Advisors will tell you that you can withdraw 4% per year and never run out of money.  The “Four Percent Rule,” as it is called, has been standard in retirement income planning for years.

Thanks to record breaking returns and higher interest rates in decades past, retirees had only a 2% chance of running out of money if they followed the 4% rule. Sounds acceptable, right?

Not so fast! A 2013 study says today’s retirees have a whopping 57% percent chance of running out of money if they follow the 4% withdrawal strategy. (Read more here.)

Why the dramatic change? Big losses in 2001 and 2008, today’s low interest rate environment, and increased longevity are the perfect storm where the 4% Rule is concerned.

Say Goodbye to the 4% Rule for RetirementSo where can retirees turn for reliable lifetime income? Fixed Index Annuities offer a safe alternative to the 4% withdrawal strategy. To learn more, I invite you to read some of our articles on guaranteed lifetime income.

When you’re ready, we welcome the opportunity to answer your questions and run a guaranteed lifetime income quote customized to your needs and goals.

Schedule an appointment or give us a call at 855-MY-AWUSA!


This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.


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About Annuity Watch USA

Annuity Watch USA is proud to be on the forefront of innovative financial solutions for the individual investor. Using a combination of educational videos, podcasts, and timely blog posts, Annuity Watch USA provides tools and resources that help people learn more about strengthening their retirement futures through retirement income planning. Annuity Watch USA has helped thousands of people start their personal journeys towards a stronger retirement with strategies designed to protect principal, generate retirement income that can’t be outlived, and eliminate market loss. Additional information on Annuity Watch USA can be found by visiting our home page at www.AnnuityWatchUSA.com