Recent research by J.P. Morgan and Morningstar suggests a dynamic retirement income withdrawal strategy may significantly increase the likelihood of not depleting your assets during your lifetime. Previous studies suggested a 4% withdrawal rate (adjusted for inflation each year) was a safe amount; meaning that a retiree would still have money 30 years later. However, with stock and bond returns expected to be less than historical averages in the years ahead, the probability that a static 4% withdrawal rate will work in the future is lower.
This new research suggests that periodically adjusting withdrawal rates and portfolio allocations based on changes to the markets, economy and personal situation will help maximize lifetime assets and enhance the overall retirement experience.
Please see Breaking the 4% Rule for additional details and insight.
