It may be time to give the 4% rule an upgrade. Retirement planners have used the popular guideline for their retirement withdrawal rates, but why is its creator saying that it’s time for a revision? In this episode of Decoding Retirement, Robert "Bob" Powell speaks with Bill Bengen, "4% rule" Researcher/Author of "A Richer Retirement", about how to create a retirement income plan. Despite pushback from other voices in the retirement advising community, Bill touts his new and improved "4.7% rule", which is meant to be used a guideline for retirees’ retirement withdrawal plans. Find out all the details in this week’s episode of Decoding Retirement. Creating a retirement income plan (:45) What are Bill’s 8 customizable elements of retirement income plans? "The idea is to keep your withdrawal close to the level of inflation to maintain your lifestyle." Asset allocation (6:30) How should retirement planners set up their investments? "It’s a very individual thing." Withdrawal timing (15:00) What’s the best way to withdraw your retirement income? "We can select with confidence a withdraw rate that accurately reflects what’s happening in the past and hopefully the future." Video highlights: :50 – Retirement income plan 3:30 – Planning horizon 6:20 – Asset allocation 11:20 – Portfolio rebalancing 15:00 – Withdrawal timing 20:00 – Asset-liability matching 21:00 – Alternative retirement income Retirement planning doesn’t mean locking up your money for a rainy day and forgetting about it. Planning your future means reacting to events today. Decoding Retirement gives you the tools to navigate the years ahead, and take action now! Yahoo Finance’s Decoding Retirement is hosted by Robert Powell, and produced by Austin Rivera. Find more episodes of Decoding Retirement at https://finance.yahoo.com/videos/series/decoding-retirement.
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Video Highlights
0:00 Intro retirement withdrawals
0:50 Retirement income plan
03:30 Planning horizon
06:20 Asset allocation
11:20 Portfolio rebalancing
15:00 Withdrawl timing
20:00 Asset-liability matching
21:00 Alternative Retirement income
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