"So if you've managed to save $4 million for retirement, you probably know that you've landed in a pretty good spot. This especially holds true if you're debt-free and are looking at a pretty generous monthly benefit from Social Security, which may be the case if you earned enough to accumulate a $4 million nest egg. That doesn't mean you don't have to be mindful of your finances in retirement, though."
"The 4% rule has long been popular among financial professionals, and it allows you to withdraw 4% of your nest egg your first year of retirement and adjust future withdrawals for inflation. The 4% rule is generally appropriate for people who need to get about 30 years of income out of their savings and have a fairly even mix of stocks and bonds in their portfolio."
A $4 million nest egg provides substantial retirement flexibility but still requires disciplined planning. Typical withdrawal rules yield approximately $120,000 at 3%, $160,000 at 4%, or $200,000 at 5% annually before taxes. The 4% rule aims to provide about 30 years of income for balanced stock-and-bond portfolios, while more stock-heavy allocations may sustain higher withdrawals and conservative portfolios may require lower rates. Withdrawals from taxable accounts like traditional IRAs or 401(k)s are subject to income taxes, reducing net income. Social Security and other income sources can supplement withdrawals to meet retirement needs.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]