Article in Summary:
- The popular 4% withdrawal rate may not be the right rate
- Inflation rate is not the driver in retirement
- The driver for most clients is not cost-of-living, but your “standard of living”
While I recognize that the 4% withdrawal rate has become the standard wisdom in financial planning, I respectfully disagree. Keep in mind that most financial planners are actually investment managers, and so minimizing the withdrawal rate keeps more assets under management for them, and correspondingly higher fees.
It seems to me that a withdrawal rate must take into account the after-tax return to the client. …Read More