How much you can afford to spend in retirement?
It’s a question the majority of us inevitably face; yet it’s an answer that can prove elusive. This is where the 4% Rule can help. The 4% Rule is a general rule of thumb for how much you should be able to spend in retirement.
According to the rule, you should be able to spend about 4% of your starting nest egg value each year. So if you begin retirement with a portfolio of $1 million, then that should support roughly $40,000 in annual spending. Keep in mind, each situation will vary by investor, so consult with your financial advisor to see if this makes sense for you.
Watch our video to learn about how the 4% Rule fits in to your long-term financial plan.
To learn more about this rule and 3 steps to take to manage your money, download the free Personal Capital’s Guide to a Better Financial Life.
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The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.