The 4% Rule

4 Percent Rule Facts You Should Know

Excerpt:

The rule is designed to work over a 30-year period, which will practically never be your timeline. For people who retire in their 60s, the expected lifespan is well within the 30-year window. A 65-year-old retired couple has about an 18 percent chance of either of them reaching 95, which gives them a very small probability of outliving their assets. Some people would say they are almost guaranteed to not run out of money too soon, especially when you factor in the fact that almost everyone will have some form of Social Security and home equity to tap if the worst case scenario actually materializes.

Comment: Not sure if I will live 30 years! (Frankly not sure if I want to). But my Mother is 94 and going strong. She has not run out of $$ and believe it or not still saves! Summary: want to live as long as the Lord enables me. And I want to serve Him faithfully until the end. We are approximately 21 months from retirement (if the Lord wills!). Kathee will be 65 in April of 2016. I will be 66 1/2. Feels right. My initial plan is to withdraw at a 3% rate. Maybe even 2.9%

On the 4% rule

Is the 4 Percent Rule Still Relevant for Retirees?

Excerpt:

It's useful to know that initially withdrawing 4 percent of your retirement savings would allow most people to avoid running out of money through all kinds of historical scenarios. But with bond and stock returns now excepted to be lower than historical averages, it's prudent to shine the spotlight on the safe withdrawal rule to make sure retirees are still being conservative by withdrawing 4 percent of assets. Perhaps the safe number is now 3.5 or 2.8 percent.

Comment: I think we are going to start with a 3% rule and see how that goes.