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Questioning the 4% Rule of Thumb - ThinkAdvisor; Morningstar
For many years, the standard guidance for drawing down deferred compensation balances (IRSs, 401Ks, etc.) was to start with a 4% assumption and adjust it as needed to account for inflation. Lately, though, given economic circumstances, paltry interest rates, and the like, this rule of thumb is subject to question. in a post by Morningstar’s Christine Benz, a retirement planner and researcher Jonathan Guyton suggest a different way to approach the management of fund balances. Specifically, he advocates a “flexible withdrawal” approach, as explained by Ms. Benz in her post, which you can access here…
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