Overview
- Investopedia explains that the 4% guideline was a historical heuristic for 30-year horizons and is less dependable now given longer lifespans, lower expected returns, and rising health costs.
- Suze Orman now recommends starting near a 3% withdrawal rate, saying today’s interest-rate and longevity realities make 4% too aggressive for many retirees.
- Yahoo Finance highlights sequence-of-returns risk, noting that early bear markets can permanently dent portfolios and make simple 25x targets like $3 million for $10,000 a month misleading.
- Planners increasingly favor flexible methods such as dynamic withdrawals with guardrails, multi-bucket cash and bond reserves, and income-focused portfolios that prioritize dividends and distributions.
- Coverage notes that persistent 3% inflation shortens purchasing power and can necessitate lower starting withdrawals—around 3% to 3.5%—and higher savings targets than traditional plans assumed.