Make Retirement Savings Last Financial Advice Ask the Experts AARP Ever
Make Retirement Savings Last - Financial Advice - Ask the Experts - AARP Ever...
A. Many financial advisers recommend withdrawing no more than 4 percent of your assets in the first year of . Whatever that dollar amount is, they say, you then increase it by 3 percent each subsequent year to keep pace with inflation. For instance, if you've got a $100,000 nest egg, you'd take out $4,000 the first year. The second year, you'd take out $4,120 — that extra $120 is 3 percent of $4,000. See also: Photo by Chuck Place/Alamy To ensure savings last, live on a smaller piece of your retirement pie. With your remaining assets continuing to generate earnings, this strategy should carry you forward 30 years or so without exhausting your holdings. However, there is a growing belief among experts that 4 percent may be too much to withdraw in light of the , falling stock prices and lower interest rates. They say your money won't last if you stick to the traditional 4 percent rule, and that 3 percent, or even 2 percent, may be more realistic, depending on your age and your family longevity history.
Whether you take 2, 3 or 4 percent of a small portfolio, it isn't much to live on. That's all the more reason to make sure that you while you're working — and . It's best to work with a if you can, planning out as far as you think reasonable, into your 90s or maybe 100. There are many other decisions you'll need to make, of course, such as what assets to have in your portfolio as you age. For more information, see AARP's retirement planning page. Also of interest:
Carole Fleck is a senior editor at the AARP Bulletin. Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures
Make Your Retirement Savings Last
Many financial advisers still recommend the traditional 4 percent solution for retirement spending
Q. I'm going to retire in the next few years, I want my. How much can I safely take out of my retirement account each year when I'm no longer working?A. Many financial advisers recommend withdrawing no more than 4 percent of your assets in the first year of . Whatever that dollar amount is, they say, you then increase it by 3 percent each subsequent year to keep pace with inflation. For instance, if you've got a $100,000 nest egg, you'd take out $4,000 the first year. The second year, you'd take out $4,120 — that extra $120 is 3 percent of $4,000. See also: Photo by Chuck Place/Alamy To ensure savings last, live on a smaller piece of your retirement pie. With your remaining assets continuing to generate earnings, this strategy should carry you forward 30 years or so without exhausting your holdings. However, there is a growing belief among experts that 4 percent may be too much to withdraw in light of the , falling stock prices and lower interest rates. They say your money won't last if you stick to the traditional 4 percent rule, and that 3 percent, or even 2 percent, may be more realistic, depending on your age and your family longevity history.
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Whether you take 2, 3 or 4 percent of a small portfolio, it isn't much to live on. That's all the more reason to make sure that you while you're working — and . It's best to work with a if you can, planning out as far as you think reasonable, into your 90s or maybe 100. There are many other decisions you'll need to make, of course, such as what assets to have in your portfolio as you age. For more information, see AARP's retirement planning page. Also of interest:
Carole Fleck is a senior editor at the AARP Bulletin. Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures