How 2020 Broke Retirees' 4% Rule
If you're planning for retirement, you may have heard of the 4% rule. The rule says you can safely withdraw 4% of a retirement portfolio's balance in the first year of retirement, then adjust the withdrawal for inflation every year after that. The model assumes a steady 50/50 split between stocks and Treasury bonds. Following the 4% rule should mean you'd never fully deplete your portfolio over a 30-year retirement period.
But 2020 might've changed all that. Someone retiring today might not be able to expect the same level of returns that the markets provided for the past 150 years. Here's why.
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Source Fool.com
