We recently had a piece released in FA Magazine titled "The 4 Percent Rule: Static Decisions In A Dynamic World". In the article, we explore the implications of the widely accepted “4% rule” used by retirees to manage their withdrawals. We find that a static rule (4%) based on a dynamic funding instrument (the stock market) leads to inefficient method for retirement planning when both the probability of failure and the cost of surplus are considered. We then explore a more dynamic rule and show how it can reduce both your probability of failure and cost of surplus.
Any feedback or thoughts are much appreciated.