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Retirement and the 4% Rule - Things Aren't What They Used to Be

Updated: Nov 13, 2021

You may have heard about the 4% retirement withdrawal rule - even if you have not, read on..

The Landscape Has Changed

Remember that 4% withdrawal rule we always heard about? Or maybe you're just hearing bout it for the first time)?  Well it just might not really work with interest rates so low. Add on this new Bear market after an 11 year Bull run and sequence risk has now entered the picture as well. On top of that, there is a wage gap for women. According to a report released in April of 2016, The Devastating Long-Term Effects of the Gender Pay Gap— And How Women Can Begin to Address Them, the disparity in the pay gap for full-time working women can total nearly $500k over the course of a women’s career. Then consider that women are living longer. In fact we all are – so we have longevity risk that we need to plan for appropriately when developing our retirement plans so that we do not run out of money.

Couples are getting divorced at a ridiculous pace, so perhaps it makes sense to consider running a retirement projection as if you were to divorce. Planners could treat a divorce like a "long-term care event", and even if you are not considering a divorce, it is prudent to understand the potential financial impact on your retirement plan and test the success rate of the modified scenario. Better to be safe than sorry. It may even deter a divorce or two. Who knows?

Work with a professional for comprehensive advice on strategies that address your specific retirement planning needs.

The information, tools and material presented by the Author are provided to you for informational purposes only and are not intended to be and should not be used or considered as an offer, recommendation or a solicitation to sell or an offer, recommendation or solicitation to buy or subscribe to any financial instruments, investment management services or advisory services. The Author does not intend to provide investment, tax or legal advice. 


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