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Testing The 4%-A-Year Retirement Rule

Tuesday, March 6, 2012 - 5:50 AM
It seems like the 4% rule has been around for decades, but according to this Wall Street Journal article, it was first publicized in 1994 by Bill Bengen, a financial planner in Southern California. In the WSJ article, he discusses the risks that exist today and the composition of a portfolio that's representative of his 60-year-old clients.
However, he says the next five years could be crucial, particularly for individuals who retired in 2000 and have experienced two major stock-market downturns since then. He expects stock returns to be low for a while; if that is coupled with high inflation rates, "then retirees have a big problem," he says.

Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
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