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Withdrawal 'symptoms'

How much are people actually withdrawing from their retirement accounts? And, more to the point, how much should be withdrawing?

By Nevin Adams | Updated on August 02, 2013

I was recently asked about the so-called 4-percent “rule.” That’s the rule of thumbthat many financial consultants rely on as a formula for how much money can be withdrawn from retirement savings every year (generally adjusted for inflation) without running out of money. Of course, like so many of the “assumptions” about retirement, certainly in the aftermath of the 2008 financial crisis, that withdrawal rule of thumb has drawn additional scrutiny.

At the time, my comment was that the 4-percent guideline is just that – a guideline. What’s not as clear is whether adhering to that guideline produces an income stream in retirement that will be enough to live on. 

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