What is the ideal retirement withdrawal rate?

A CNN reader asks, “I hear I can take only 4% a year from my portfolio. Why can’t I take more?”  — Alfred Williamson, White Hall, Md.

Money expert says, “The oft-cited rule is to start by pulling 4% from your savings and then increase the dollar amount of that draw by the inflation rate each year to keep up your purchasing power. (That annual inflation adjustment is why you can’t just withdraw what your investments earn.)

Do that, and you have a good chance that your nest egg will support you for decades.

Real-world complications, though, can wreak havoc with the 4% strategy — just ask anyone who left work on the eve of the 2000 or 2008 bear markets.”

Read more:

http://money.cnn.com/2012/11/02/pf/expert/retirement-withdrawal-rate.moneymag/index.html?iid=HP_River

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About UWF Center on Aging

The Center on Aging at the University of West Florida was established in the Fall of 2010 when the School of Psychological and Behavioral Sciences faculty along with assistance from Sponsored Research submitted a grant to the State University System Board of Governors in support of aging initiatives for Northwest Florida. Its mission is to improve the quality of life of aging adults through the application of science to address challenges associated with aging and to promote healthy aging, with an emphasis on prevention. This will be accomplished through inter-disciplinary and inter-professional efforts of basic and applied research, consultation, and partnerships with community agencies. Education and training, direct services to the aging population, and public awareness and understanding of the contributions and needs of elders will be primary objectives.
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