Yellow Star
Yellow Star

4% Rule and Customized Retirement Strategies

published: capitals growths | jul 16, 2024

Yellow Star
Yellow Star

4% Rule

Advises a retirement corpus should be 25 times the first year's expenses to sustain withdrawals over 30 years.

Yellow Star
Yellow Star

Limitations

Includes rigidity with inflation rates, suitability mainly for older retirees, and outdated financial assumptions.

Yellow Star
Yellow Star

Customized Planning

Involves mapping future expenses, adjusting for inflation and timelines, ensuring a tailored approach to retirement.

Flexibility

Recommends adjusting withdrawal rates based on investment performance to prolong the corpus's longevity.

Risk Management

Emphasizes managing investment risks and volatility to safeguard long-term financial security.

Goal Seek Method

Uses Excel's Goal Seek function to determine the precise retirement corpus required, factoring in projected expenses and investment growth.

Quick Calculator

Offers a simplified 5-step process for estimating retirement corpus, ideal for quick estimates but less detailed than comprehensive planning.