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Fundamental Changes to Retirement Planning by the Creator of the Popular “4%” Rule - Business Insider
Most of us who plan for retirement have heard of the “4% rule” – that is, if you limit your withdrawals to 4% of your investment portfolio annually, it should last you a lifetime (that’s a simplified description, but fairly accurate). Well the financial guru who created that rule now suggests there’s a better way to manage your investments than the most popular one used by most in the younger generations.
“Target Date Funds” usually adjust the composition (the proportion of stocks to bonds) of your investment portfolio for risk management as you get close to retirement. Now, however, this same financial guru thinks that maintaining more stocks in you portfolio longer is a better plan. This is described by William Edwards in this interesting Business Insider article.