Unlike an earlier point in one’s adult life, in later points it becomes increasingly important as to how to properly reap the rewards of your early investments and enjoy a reasonable retirement. In order to not take out too much money too fast, one needs to calculate their projected expenses and take into account the changes and differences between a working life and a retirement life, as well as examining the last year’s expenditures. After taking into account such things as Medicare and Social Security, one is able to properly figure out how much money at a time one can take out of one’s own savings pool. These numbers should also be modified to take into account variables such as inflation and perhaps an earlier retirement.
- Now that you’ve accumulated a retirement savings, you need to figure out how to make it last for the rest of your years.
- The first thing to do is to develop a retirement budget, figuring in all of your living expenses and costs.
- The 4% rule says that you will withdraw 4% of your savings each year of your retirement for thirty years.
“One popular guideline has been the 4% rule, which was designed as a safe withdrawal rate for a 30-year retirement that may include bear markets and periods of high inflation.”