How Much You Can Spend in Retirement?

First Published Date: June 6, 2015

A retired financial planner in California, Bill Bengen, researched and came up with his 4 percent retirement rule. The New York Times recently published a detailed article on this, as his retirement 4 percent concept has attracted criticism both accepting and rejecting it.

Based on the assumption of that the retirees’ portfolio is made of stocks and bonds half half, Mr. Bengen’s 4 percent withdrawal concept survived every thirty year period from 1926.

However, there are other complex methods created by retirement analysts that call to withdraw from 2.85 percent to 4.95 percent, as the article points out.

Critics argues that Mr. Bengen’s method does not take account into various factors such as investment fees, tax rates, locations, etc. and should not apply to all retirees.

If you search online for various methods of retirement withdrawals, you will be astonished to see how many are there. The best course of action is not to go by any single idea you stumble into. As everyone’s situation is unique, it’s best to seek help and sit down with a qualified financial professional who can assess your own situation and create a plan that will suit your needs and lifestyle.

Free Financial Planning Software

Developed by Boston University economist Laurence Kotlikoff, ESPlannerBASIC Canada is free financial software that can calculate how much you can spend and save to sustain your living standard in retirement life. The planning tool takes consideration into other factors such as changing jobs, moving, having kids, pensions, etc. can affect your financial future. You can access this free tool here:

Featured

How Much Do Rich People in Canada Need to Retire?