That is wise.You're much better off with a variable withdrawal strategy. That way you can withdraw more when things are going well while protecting yourself against running out of money when things are going badly. Income may vary, but variations can be smoothed with many variable withdrawal methods.
So, use it (4% SWR) as a rule of thumb for deciding to retire if you're so inclined, but don't use it as a fixed withdrawal strategy.
4% SWR was the very first historically researched spending method, as such, there have been far better spending methods developed since then.by Kenkat » Fri Nov 07, 2025 10:03 am
ttcbj wrote: Fri Nov 07, 2025 9:43 am
If you are interested in a detailed analysis of many different alternatives to the 4% rule, you could read the "Retirement Planning Guidebook" by Wade Pfau. It covers the basis for the 4% rule (its really like a worst-case of 60-40 portfolio history). It also covers many other strategies and analyzes their tradeoffs in detail.
Another is “Living Off Your Money” by Michael H McClung. He takes very deep dives into various alternate withdraw strategies with lots of detail backing it all up.
I'm using the "RMD portfolio spending method" specifically because it does annually apply an age-based (slowly rising) percentage to your most recent annual portfolio value (plus spending interest and dividends), thus you are annually adjusting your spending to the remaining portfolio value. The retiree can see next year's spending vary as the portfolio value fluctuates this year.
Delaying Social Security to age 70 with its annual inflation boosts is another helpful buffer to increase steady income in later years.
Note how easy it is to patiently use each of these minor separate boosts to portfolio safety in retirement.
Statistics: Posted by heyyou — Fri Nov 07, 2025 10:36 pm — Replies 77 — Views 4675