A rule of thumb in retirement planning holds that retirees who annually spend only 4% of their investment portfolio—adjusted for inflation—will be able to extend their savings for the rest of their life. This rule, however, has recently experienced criticism with the risk of weaker market returns, increased life span, or both. An alternative rule provides that you divide your age by 20 in order to get the percentage you can safely spend. To understand this alternate’s effect, the Article interviews three people who retired in their 30s and 40s for further understanding of how it paid off.
See Ben Steverman, How to Retire at 40, Bloomberg, September 29, 2016.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
