Rest of the Story
The most important question posed by clients to their financial planner is: "How much can I withdraw from my retirement portfolio each year and still be sure, or at least very confident, that I will not outlive my money?"
In his landmark 1994 article, Bill Bengen presented his answer to this question. He argued that a well-allocated portfolio subjected to an initial 4 percent withdrawal and adjusted for annual inflation thereafter would survive at least 30 years in almost all scenarios. Since then, the "4 Percent Rule" has been so widely accepted that financial planners regularly present this recommendation to their clients.
There have been many challenges to the 4 Percent Rule. Some argue 4 percent is too low while others argue it is too high. In January 2013, David Zolt’s article, “Achieving a Higher Safe Withdrawal Rate With the Target Percentage Adjustment” was published in the Journal of Financial Planning. In this article, David demonstrates that the Target Percentage technique that he developed increases traditional safe withdrawal rates by 50%. To read this article and/or watch a one-hour presentation of the article go to www.TargetPercentage.com
Read Andrew Gluck's story at Advisors 4 Advisors: CFP Who Was A Consulting Actuary Taught Himself Programming And His New Software Is Simple, Effective, And Adds A New Twist To Finding A Safe Retirement Withdrawal Rate
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