Elaine, Megan, Four Percent discussed on The Yeisley Financial Hour

Automatic TRANSCRIPT

And these are all things you've heard maybe you just haven't had the opportunity to fully investigate them to learn the truth radio want to ask you though, or any misconceptions out there about some of the retirement planning tools that are available to us today. Well, I think so many people Megan have heard of this four percent rule that basically was derived back in nineteen ninety four I believe by a gentleman that became a financial adviser. And at the time that he did this in the early nineties the accepted withdrawal percentage had been five percent. And so he was evaluating historical market performance to determine if that was still accurate or not in through all of his analysis. He concluded that it was really. About four and a half percent. But it became known as the four percent rule. And so that has been in place in so people use this rule of thumb that says that you can withdraw four percent of your nest egg adjusted for inflation every year, assumes a sixty forty portfolio. In other words, sixty percent equities forty percent in fixed income securities, and you probably won't run out of money. The problem with any rule of thumb is that it was done at a given point in time. And that was in the nineties if you recall, the nineties were the longest bull run of the stock market in history. And so what works then may not work today. And I've done a lot of analysis looking at the volatility that we have seen since the year two thousand and our stock markets, and if you were to apply the four percent rule today. In fact, we just did this. We have a client that. I'll call Elaine. And so a lane had about a million dollars in her portfolio. So these nother rule of thumb we talked about as a million dollars is enough. So we actually looked at if Elaine were to take that million dollars apply. The four percent rule and just make withdrawals inflation adjusted over time would she have enough money to sustain her throughout retirement. It turns out that following that four percent rule. She would only have a sixty six percent probability of success. Or in other words, only a sixty six percent chance of not running out of money in retirement. We were able to reposition some of those assets for her use some different financial tools, some different financial products for portion of her portfolio, and we were able to raise that probability of success from sixty six percent ten ninety nine percent. Which would you rather have going into retirement sixty six percent chance of not run out of money or a ninety nine percent chance of not running out of money. This is the kind of analysis that we do every single. Day in helping people just think through what they should do with their money. How should they deal with the market's volatility today? We would love the opportunity to sit down with you and help you think through some of these issues to determine if you have enough money or not or how you should be deploying those funds to make sure the euro are going to have enough income throughout retirement. Give us a call right now. Our telephone number is three one six four two five three thousand that's three one six four two five three thousand make an appointment. Come in and sit down with us. This have a casual conversation. I'd love the opportunity to show you how we can give you a greater probability of success in your retirement, but you have to call call now. Three one six four two five three thousand the final retirement planning myths on the show today, they might not even be on your radar. Find out what they are. And why believing them could mean trouble for your? Nanteuil health. That's.

Coming up next