Unpopular opinion: I think the 4% retirement rule is broken now.

I was talking to my friend who works at a credit union in Boise last week. She told me she's telling clients to plan for 2.5% withdrawals, not 4%, because of how high things cost now. That hit different because I've always just followed the old rule. She showed me her own plan, and she's putting away $800 more a month than I am. It made me actually run my numbers again. Has anyone else dropped their safe withdrawal rate lately?

4 comments

4 Comments

piperbailey2mo agoMost Upvoted

My buddy's financial advisor just told him the same thing, said to aim for 3% now.

wren63829d ago

Wait so first we were supposed to save enough to live on 4%, now it's 3%, maybe by next year we'll need a solid 2%. Guess I'll just work until I'm 90 and hope for the best. Anyone got a magic 8-ball to tell me the real number?

spencer_coleman2mo ago

Isn't it wild how that number keeps moving? Feels like just a few years ago everyone was saying 4% was the safe bet, now it's down to 3. Makes you wonder if the goal is just to keep us all scared and saving more, like we can never actually win. I see this with all kinds of expert advice lately, where the rules change just fast enough to make you feel behind. Kinda makes you want to just tune it all out sometimes lol.

the_taylor2mo ago

I always stuck with 4% too, but hearing that from a pro really got me. @piperbailey's friend's advisor saying 3% lines up, guess we all need to adjust our plans.