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  • Writer's pictureWiseWallet

Decoding the 4% Retirement Rule: Is It Still Relevant in 2024?

Before diving into the specifics of the 4% rule, it's crucial to have a solid foundation in retirement planning. If you haven't already, check out our introductory guide:


The 4% rule, a cornerstone of retirement planning, proposes withdrawing 4% of your retirement portfolio in the first year and then adjusting that amount for inflation in each subsequent year. This strategy is designed to make your savings last for 30 years. However, given the evolving financial landscapes, one might wonder: Is the 4% rule still a reliable guideline in 2024?

So What?

Recent studies, including a recent Morningstar study, indicate that the 4% rule might still hold true in 2024. Due to higher bond yields and weaker forecasts for equities, a conservative portfolio with 20-40% equities could allow for a 4% withdrawal rate with a 90% probability of lasting 30 years. However, the rule's effectiveness hinges on several factors, such as market performance, inflation rates, and personal spending habits.

Now What?

  • Evaluate Personal Circumstances: Tailor your spending plan according to your unique financial situation, rather than relying solely on a generic rule.

  • Consider Portfolio Composition: Diversify your investment portfolio, balancing between equities and bonds, to optimize your withdrawal rate.

  • Stay Informed: Keep abreast of market trends and economic forecasts, as they can significantly impact the viability of the 4% rule.

  • Plan Flexibly: Be prepared to adjust spending and withdrawal rates in response to market changes and personal life events.

The 4% rule remains a useful benchmark in 2024 but should be adapted to individual circumstances and market conditions. A balanced approach, combining this rule with ongoing financial assessment and flexibility, is key to a sustainable retirement strategy.


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