The 4% Rule | Recap + Highlights

Jul 5, 2020

It’s Sunday, which means...It’s recap time! 

This week, we looked at the 4% rule, a short-hand rule of thumb that helps you calculate how much of your portfolio you can safely withdraw in retirement without running out of money. 

The 4% rule is a useful tool, but it has some serious drawbacks, so this week I talked about when you can use this rule of thumb and when it’s better to use more sophisticated tools to help you make important decisions about something as dynamic as your retirement. 

Here’s what we covered in each episode this week:

• A primer to the 4% rule, explaining what it is and how it works
• The problem with the 4% rule and why this rule is often oversimplified
• When the 4% rule works really well
• And lastly - a better alternative to the 4% rule - a monte carlo analysis that lives your retirement 1000 different times rather than relying on a one-size-fits-all rule of thumb.

Hopefully after listening to the One Minute Retirement Tip this week, you know more about how the 4% rule can help you plan for retirement, while also realizing it’s limitations. 

And if you want to dive deeper and figure out if the plan you have in place for retirement will actually last, I offered a free retirement success forecaster that fills the gaps where the 4% rule falls short. If you just email me at [e-mail], I’ll send you a quick worksheet to complete to get your personalized results for free. So just email me at [e-mail] for your free retirement success forecaster and personalized results. 

Tomorrow, we are starting a brand new theme: What are tax-free bonds. I’ll talk all about tax-free municipal bonds - the benefits, the drawbacks, who should invest in them, and the myriad of ways you can invest in municipal bonds if you determine that this type of investment makes sense for you. 

That’s it for this week! Thanks for listening and I hope you have a blessed Sunday! 

My name is Ashley Micciche and this is the “One Minute Retirement Tip”.

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