"Saving for retirement is not an easy thing to do. But finding the money for retirement savings is only half the battle. You'll also need to invest your money so it grows into a larger amount over time. And to that end, you'll generally hear that it's best to invest in the stock market, despite the risks involved. Of course, once you manage to build up your retirement nest egg, you'll need to manage that money strategically."
"For years, financial experts were quick to recommend the 4% rule for managing a retirement portfolio. The rule states that if you withdraw 4% of your portfolio's value your first year of retirement and adjust future withdrawals as needed for inflation, your savings have a strong chance of lasting 30 years. If you retire at a fairly traditional age, there's a low likelihood of running out of money with the 4% rule."
"Financial guru Dave Ramsey, however, has a different suggestion for managing a retirement portfolio - the 8% rule. However, you should know that his strategy carries a lot of risk. The 8% retirement rule is similar to the 4% rule, only it allows you to take withdrawals that are twice as large. With Ramsey's strategy, you withdraw 8% of your portfolio's value your first year of retirement and adjust future withdrawals for inflation."
Saving for retirement requires both finding money to save and investing those savings so they grow over time. Investing in the stock market generally offers higher growth potential but introduces greater risk. The 4% rule recommends withdrawing 4% of portfolio value in the first retirement year and adjusting withdrawals for inflation, offering a strong chance of lasting 30 years with a mixed stock-and-bond allocation. Another strategy proposes an 8% rule, withdrawing 8% initially and adjusting for inflation, which assumes a 100% stock allocation and therefore carries substantially higher risk. Heavy stock allocations are more appropriate during accumulation years than at retirement.
Read at 24/7 Wall St.
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