Are you actually using the 4% rule?
Go to main Forum page This is where you will find valuable discussions
AUTHOR: Bogdan Sheremeta on 9/16/2025
The 4% rule (or is it 4.7% now?) is supposed to be a simple way to figure out how much you can safely withdraw each year, but I’m curious – do retired people really follow it?
While it’s a decent projection, I imagine there are plenty of circumstances where a fixed percentage needs updating – health expenses, market swings, helping family, inflation surprises, or even big life events like moving or starting a new chapter you hadn’t planned for.
For those of you already retired (or closer to it), I’d love to hear if you actually stick to 4%, or is it more of a guideline you adjust as life happens? If you do withdraw more or less, how do you track or budget for potential changes in next year’s withdrawals?
QUINNSCOMMENTARY 
No I don’t use the 4% rule. I use the RMD rule which is what people use who have IRAs, 401/3 plans. Unless you have money in a taxable brokerage account which most retirees do not have. I suspect for most retirees the 4% rule is useless. Within several years after starting RMDs, the withdrawal rate is greater than the 4% rule rate.
Bob Andritsch
LikeLike
Still working even though beyond the Required Beginning Date. Still deferring payout commencement. One fouth of retirement savings in Roth.
Assuming I stop working and commence payout in 2028, as planned, the RMD percentage applied to tax deferred savings will be a little less than 4% of the total. Even then, it will likely be a greater required distribution than the amount we will need to maintain our current standard of living (unless inflation continues to go wild) – at least for the first few years of retirement. I plan to follow the RMD rule in terms of taxable distributions, and will likely spend all of those monies (increase our spending in retirement to fill the “not so free” time with travel and extras, or if health fades, with medical spend).
You might call it 4% with guardrails.
Best to you.
LikeLike
Al Lindquist
Over the past 100 years 3% is the average rate of inflation, thus the 4%+3%. Using a fund we have invested with forever I had a hypothetical done–01/01/2000 a $300,000 portfolio invested in a blue chip, dividend paying, value fund was set up to do 4+3 thru the 1st quarter of 2025. No expenses omitted. Very rough 25-year period.
total withdrawal $443,793.00 with an ending (3/31/25) value of $743,727.00–same amount and withdrawal from S&P 500 Index shows a slightly lower dollar amount withdrawn as you begin 2025 with no shares as one runs out of $. No expenses at all.
Do I use it? No! At this stage of my life pension/SS for 2/and dividends from 3 tax-free inherited funds is just fine. Cash bucket filled by RMD from both of us.
It pays to have invested since 1969 never missing a month (including 2025) and using a few good funds as well as having no divorce–2 healthy kids who did 4 college years followed by employment.
Would I use 4+3–absolutely if I had to–probably go with cash dividends first, but I sit here and see in black and white it can work if you emphasize solid blue chip companies that pay dividend in a well managed fund.
I also pays to have a large bucket of cash.
LikeLike