Retirement Planning: Is the 4% Rule of Thumb Right for You?

Retirement and the 4 percent rule of thumb

Rules of thumb can be great. They allow us to take complex topics and make them simple. For example, you’ve probably heard that you should change the oil in your car every 3,000 miles. We don’t need to understand much about cars to follow this rule. Simply read the little sticker Jiffy Lube puts in the window and take the car in when required. Following this rule of thumb helps us to believe we’ve protected ourselves and our vehicle from the bad things that would happen if we didn’t get the oil changed.

However, there are a couple potential problems with rules of thumb. First, they rely on everyone’s situation being the same. There are many types of cars and many types of drivers. Does it really make sense that they all require identical treatment? Continue reading…

Retirement Planning Rules of Thumb – Recipe for Success or Failure?

Retirement Planning Rules of Thumb

Rules of thumb can be great.  They allow us to take complex topics and make them simple.  For example, everyone has probably heard the phrase “change your oil every 3,000 miles”.  I don’t need to understand anything about how cars or oil work to follow this rule.  I simply read the little sticker Jiffy Lube puts in my window and take the car in when required.  By doing so, I believe I’ve protected myself from the bad things that would happen if I didn’t change the oil.

However, there are a couple potential problems with rules of thumb.  First, they rely on the everyone’s situation being the same.  There are many types of cars and many types of drivers.  Does it really make sense they should Continue reading…