You take a balanced portfolio of, say, 60% stocks and 40% bonds, withdraw 4% of it in the first year of retirement, and then withdraw that same dollar amount plus an inflation adjustment each year after that.
Yet plenty of researchers and media commentators have criticized this strategy. Some say the rule needs tweaking in light of the expectation that average rates of return will be substantially lower in coming years. Others say the strategy forces retirees to sell stocks even when they’ve lost value. Those are just two of the criticisms.
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