Withdrawal Rates: The Flaw in the 4% Rule
Jul 10, 2008
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By Elaine Floyd, CFP®
Distributing 4% from a traditional retirement portfolio is too risky, says Nobel laureate William Sharpe. He suggests investing in a series of zero-coupon bonds for a 4.46% withdrawal rate. Or why not give clients a choice: risk-free distributions with bonds or a variable rate based on a market portfolio?