Planning for Retirement?
There are so many different ways to plan for retirement that it can be overwhelming. Because of this, many people are trying to find answers online and come across what is called the "4% Rule."
What is the 4% Rule?
The 4% Rule is a financial planning concept created in the 1990s, which essentially says that when you retire, you should be able to draw 4% (adjusted for inflation) of your total portfolio value each year, and that money should last you 30+ years.
The 4% Rule is Flawed
There are a few problems with this retirement plan. First, it doesn't take into account anything about your individual situation. Nothing is right for everyone, and that is especially true when it comes to financial planning.
You've got to figure out what's different in your situation and how that might impact your retirement, rather than just taking a rule of thumb from the 90s.
Another issue with the 4% rule is that it is based on a lot of assumptions. It was based on certain levels of return over those 30 years. Basing something as important as your retirement on vague projections is like throwing a dart in the dark.
Plan for Your Retirement the Right Way
The absolute best way to plan for the retirement you want is to talk with a financial advisor. Tell them your goals, your current situation, and together, you can create a plan that works for you and your situation.
Learn More About Retirement Planning
If you have any questions about your retirement plan, how to start planning, or how our team can help you, contact us today!