% Withdrawl Rule
The 4% rule suggest that retired investors can take 4% out of their portfolio every year without risking losing out of money
- Is a standard benchmark in financial planning
- Assumes interest income and gains on equities
- The withdrawl % has gone down as interest rates have gone down and asset values have gone up
- In the past when interest rates were higher, this used to the 6% rule
- A 2014 study from Texas Tech showed there is a 57% probability of portfolio favor using the 4% rule of 30 years (with 50/50 split)