Description

Have you heard of the “safe withdrawal rate?” This is a rule of thumb that helps retirees know how much they can safely take from their retirement portfolio. One of the most famous safe withdrawal rates is known as the 4% rule. In today’s episode, we’re going to talk about where this rule came from and whether it’s still relevant in today’s environment.  

During this conversation, we’ll bring in perspectives from well-known financial figures such as Suze Orman, Dave Ramsey, and David Blanchett. Stay tuned as Liz shares her thoughts on their contrasting views about safe withdrawal rates. At the end of the conversation, she’ll share how you can use a safe withdrawal rate based on your situation.   

Here’s some of what we discuss in today’s show:

• The history of the 4% rule + Bill Bengen’s updated rule in 2021
• Suze Orman’s thoughts on the 4% rule + accounting for longevity  
• Dave Ramsey’s take + Morningstar’s research in response to his claims
• David Blanchett’s flexible approach to determining withdrawal rates
• How you can find a safe withdrawal rate for yourself

Episode Resources

Morningstar Article:

https://www.morningstar.com/retirement/an-8-retirement-withdrawal-rate

Dave Blanchett’s Flexible Withdrawal Rates:

https://www.pgim.com/dc-solutions/article/guided-spending-rates-rethinking-safe-initial-withdrawal-rates

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