It’s the big question everyone wants to know the answer to…
How much money can I safely withdraw every year, so I don’t run out of money in retirement?
For decades Americans relied on the 4% Rule.1 Essentially this rule says you can safely withdraw 4% of your savings in the first year of retirement, and every year thereafter (adjusted for inflation) for at least 30 years without exhausting your portfolio.
But there’s one big problem: the 4% Rule was established in 1994. And the world has changed a lot since the 90’s.
Below are four reasons why using the 4% Rule today could cause you to run out of money in retirement…
- Historically, life expectancies are at an all-time high. So, it makes sense to plan to make your money last until you are 100+ years old.
- High inflation rates have significantly driven up the cost of living. 2 With today’s inflation rates, some expenses could double in less than 10 years.
- Some Wall Street commentators are cautioning that investment returns over the next several years could be much lower than investors expect.3
- Taxes are lower today than they’ve been in over a decade4. And given our record-breaking national debt, some tax experts warn that higher taxes could be just around the corner.5
Longevity, inflation, investment returns and taxes could all have a significant impact on your withdrawal strategy.
To learn more about what is a safe retirement withdrawal rate for your specific situation, contact us at ask@shpne.com.
[2] Rate Inflation
[3] Motley Fool
[4] Tax Policy
[5] New Retirement
The content of this advertisement was prepared by TRIAD Partners. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk, and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial advisor and or tax professional before implementing any strategy discussed herein. Hypothetical examples and illustrations are for example purposes only and individual results will vary. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product. Offices in Westborough, Marlborough, Dartmouth, and Braintree are offices of convenience and only used for client meetings. SHP Financial utilizes third party marketing and public relation firms to assist in securing media appearances, for securing interviews, to provide suggested content for radio, for article placements, and other supporting services. SHP Financial has qualified for multiple awards through various contests — some of which were based off of employee/ employer surveys, community votes, and/or paid entries.
