Many people struggle with planning for retirement. One of the most important questions that can arise is: how much can I spend? In our latest episode of Real Personal Finance, we explore some of the ways to determine your retirement spending, focusing primarily on the most common withdrawal advice.
If you’ve been researching retirement planning, you’ve probably heard of the 4% rule: assuming you have a 60% stock and 40% bond portfolio, you can safely withdraw 4% each year for the next 30 years. While it can be a handy recommendation to set it and forget it, several factors might make this suggestion less effective.
Some of the factors we discuss that might change your withdrawal rate are:
The age you want to retire at and how long you believe you will be relying on retirement, whether you’re part of the FIRE community or love working and want to go as long as possible
If there are big purchases you might want to make early on in retirement, such as travel, buying additional properties, or spending on hobbies
Market changes like inflation and economic downturns
Changing spending habits as you age
We also touch on how to determine a safe level of risk in your asset allocation to maximize your portfolio and withstand inflation.
As financial advisors, we’re here to support you, not just financially, but also to ensure you feel emotionally and psychologically secure that you will have a comfortable retirement. By being proactive at the beginning, you can focus on enjoying the rest of your life.
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Money can be confusing—but it doesn’t have to be. When you’re able to understand the complexities, you can make better decisions to improve your daily life. Are you ready to align your money with your ideal life? Connect with us at Stone Steps Financial or Swell Financial Partners.
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