Overview
- New analysis applies the 4% rule to balances of $250,000 to $2 million, pointing to first-year withdrawals of $10,000, $20,000, $40,000 and $80,000 with inflation adjustments over 20–30 years at the current 2.9% CPI rate.
- Experts stress the 4% rule is only a guideline because it omits taxes, fees, market volatility, changes in spending, required minimum distributions and longevity risks.
- Some planners highlight a guardrails strategy based on Guyton–Klinger research that may permit about a 5% initial draw on $1 million with automatic increases or cuts tied to portfolio performance.
- Social Security’s average benefit stands at $1,955.48 per month (about $23,465.76 a year), providing a material income component for many retirees.
- Adviser guidance and recent surveys underscore common pitfalls—cashing out instead of rolling over accounts, over-reliance on tax-deferred savings, poor diversification and failing to update plans—as inflation remains a top worry for many savers.