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Whereas last year's research suggested that a 3.3% withdrawal rate was a safe starting point for new retirees with balanced portfolios over a 30-year horizon, this year's research points to 3. ...
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That figure is the highest safe withdrawal percentage since Morningstar began creating this research in 2021. (The highest starting safe withdrawal rate based on similar assumptions was 3.3% in ...
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This percentage, known as a safe withdrawal rate, aims to ensure that you don't deplete your savings prematurely. Calculating your safe withdrawal rate requires you to account for your age and spending, inflation and investment returns. While the 4% rule is the most famous and commonly cited withdrawal rate, there are other, more dynamic ...
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You still need to save enough to pay for retirement. Withdrawing 4% of your retirement savings is only safe if you have enough to cover your retirement expenses. For example, if you saved only $100,000 for retirement, making a 4% withdrawal each year ($4,000) wouldn't go very far. Instead, the 4% rule can be used as a mark to set savings goals.
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Year 1: 4% of your $100,000 nest egg is $4,000. Year 2: If there was a 3% inflation rate, you would withdraw $4,120. Year 3: If there was a 2% inflation rate, you would withdraw $4,202. However, a ...
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