Is A 4% Inflation-Adjusted Withdrawal Prudent In Retirement?

Bozo   |     |   1,328 posts since 2011

Volumes have been written on saving for retirement, but less attention is given to spending in retirement. For years, the "4% rule" held sway. Others noted one should save 25X expenses (no doubt after-tax), the flip-side. Neither formula is terribly elegant. Enter the IRS.

The IRS has (believe it or not) solved this issue. Punch in "RMD calculator" into any search engine, and you will get the appropriate age factor for any age. Divide that factor by 100, and, presto, you get the percentage of your IRAs the IRS requires you to withdraw. Once you get to age 73, it peeks above 4%, but not before.

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