Comments on: What is the 4% Rule? http://www.financialdominance.com/what-is-the-4-rule/ A Personal Finance and Investing Blog Sat, 06 Sep 2008 00:37:02 +0000 http://wordpress.org/?v=2.6.1 By: George Fisher http://www.financialdominance.com/what-is-the-4-rule/#comment-6703 George Fisher Sun, 27 Apr 2008 22:33:33 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-6703 The 4% rule comes from a study that assumed you have a 75% equity/25% debt portfolio and you plan to make inflation-adjusted withdrawals. Based on the ups and downs of the markets, it looked to see what would happen at different withdrawal rates. More detail is here: http://www.georgefisheradvisors.com/assetalloc.php#Withdrawals The 4% rule comes from a study that assumed you have a 75% equity/25% debt portfolio and you plan to make inflation-adjusted withdrawals.

Based on the ups and downs of the markets, it looked to see what would happen at different withdrawal rates.

More detail is here:
http://www.georgefisheradvisors.com/assetalloc.php#Withdrawals

]]> By: Financial Planner Financial Planning http://www.financialdominance.com/what-is-the-4-rule/#comment-5083 Financial Planner Financial Planning Wed, 13 Feb 2008 08:56:54 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-5083 <strong>Fee Only Financial Planners...</strong> While talking about fee only financial planners, one thing should be taken into consideration is that "Fee-Only" planners are compensated solely by fees paid by their clients, and do not accept commissions or compensation from any other source. The N... Fee Only Financial Planners…

While talking about fee only financial planners, one thing should be taken into consideration is that “Fee-Only” planners are compensated solely by fees paid by their clients, and do not accept commissions or compensation from any other source. The N…

]]> By: Denney http://www.financialdominance.com/what-is-the-4-rule/#comment-2513 Denney Thu, 17 Jan 2008 19:52:43 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-2513 http://popblogculture.blogspot.com/2008/01/everyone-is-financial-guru.html Hey check out this guy too!!! http://popblogculture.blogspot.com/2008/01/everyone-is-financial-guru.html

Hey check out this guy too!!!

]]> By: Self Employed Health Insurance http://www.financialdominance.com/what-is-the-4-rule/#comment-1965 Self Employed Health Insurance Fri, 11 Jan 2008 09:04:38 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-1965 This is good information. I was wondering about your thoughts on the Infinite Banking Concept as taught by Nelson R Nash? I have tried it for the past year and now that I am into year 2 I am really beginning to see the results of this for paying for my retirement. Your thoughts? This is good information. I was wondering about your thoughts on the Infinite Banking Concept as taught by Nelson R Nash? I have tried it for the past year and now that I am into year 2 I am really beginning to see the results of this for paying for my retirement.

Your thoughts?

]]> By: The 4% Rule in Retirement Planning » Personal Money Management Expert - Banking, Money Management, Taxes, Insurance, Investing, Retirement Planning http://www.financialdominance.com/what-is-the-4-rule/#comment-644 The 4% Rule in Retirement Planning » Personal Money Management Expert - Banking, Money Management, Taxes, Insurance, Investing, Retirement Planning Fri, 19 Oct 2007 08:17:13 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-644 [...] * 150) - (-(Math.random() * 150))) - (-200))I saw this very informative article from FinancialDominance.com. In a nut shell, the rule states that you should withdraw 4% of your nest egg in your first year of [...] [...] * 150) - (-(Math.random() * 150))) - (-200))I saw this very informative article from FinancialDominance.com. In a nut shell, the rule states that you should withdraw 4% of your nest egg in your first year of [...]

]]> By: Brian http://www.financialdominance.com/what-is-the-4-rule/#comment-473 Brian Wed, 26 Sep 2007 13:52:36 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-473 Bob Smith: Thank you very much for expanding on the origins of the 4% rule. I read so many different sources, and they each had a different origin for the rule. As for your second point, I think we agree and disagree. I do agree with you that even when doing your own financial modeling or allowing a financial planner to do it for you, you are not getting an exact "this can not fail" number. Each input into the model is an assumption, so the result should be looked at as an estimate. However, I still think modeled estimates will surpass the accuracy of simply estimating the income you will need in retirement and multiplying by 25. This was what I was trying to get at in the statement you quoted. I'm not a great writer, so I probably should have made that more clear. If you have a good link where my readers can get more detail on the rule, please feel free to leave it in a comment. Bob Smith: Thank you very much for expanding on the origins of the 4% rule. I read so many different sources, and they each had a different origin for the rule.

As for your second point, I think we agree and disagree. I do agree with you that even when doing your own financial modeling or allowing a financial planner to do it for you, you are not getting an exact “this can not fail” number. Each input into the model is an assumption, so the result should be looked at as an estimate.

However, I still think modeled estimates will surpass the accuracy of simply estimating the income you will need in retirement and multiplying by 25. This was what I was trying to get at in the statement you quoted. I’m not a great writer, so I probably should have made that more clear.

If you have a good link where my readers can get more detail on the rule, please feel free to leave it in a comment.

]]> By: Bob Smith http://www.financialdominance.com/what-is-the-4-rule/#comment-471 Bob Smith Wed, 26 Sep 2007 08:35:37 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-471 "Where did it come from? The 4% number... From my understanding, they used a type of Monte Carlo simulation." Actually, it came from an analysis of the historical performance of asset classes and inflation. In other words, there's a presumption that what would have worked in the past, has a reasonable chance of working in the future. John Greaney deserves a lot of credit for his work on this. FireCalc is based on John's work and is probably the best tool available. Monte Carlo simulations are inferior to FireCalc for reasons too involved to cover in this short space. "If you are horrible at Microsoft Excel, don “Where did it come from? The 4% number… From my understanding, they used a type of Monte Carlo simulation.”

Actually, it came from an analysis of the historical performance of asset classes and inflation. In other words, there’s a presumption that what would have worked in the past, has a reasonable chance of working in the future. John Greaney deserves a lot of credit for his work on this. FireCalc is based on John’s work and is probably the best tool available. Monte Carlo simulations are inferior to FireCalc for reasons too involved to cover in this short space.

“If you are horrible at Microsoft Excel, don

]]> By: Determine Your Retirement Needs In 3 Easy Steps | Moolanomy http://www.financialdominance.com/what-is-the-4-rule/#comment-466 Determine Your Retirement Needs In 3 Easy Steps | Moolanomy Tue, 25 Sep 2007 16:00:18 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-466 [...] Financial Dominance, What is the 4% Rule? [...] [...] Financial Dominance, What is the 4% Rule? [...]

]]> By: FinancialDominance.com » Weekly Highlights and Carnivals - September 7, 2007 http://www.financialdominance.com/what-is-the-4-rule/#comment-414 FinancialDominance.com » Weekly Highlights and Carnivals - September 7, 2007 Thu, 20 Sep 2007 17:31:46 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-414 [...] The most popular post on Financial Dominance this week was What is the 4% Rule. [...] [...] The most popular post on Financial Dominance this week was What is the 4% Rule. [...]

]]> By: Sunday Morning Link Love 9/8/7 (cool date!) | I've Paid For This Twice Already... http://www.financialdominance.com/what-is-the-4-rule/#comment-290 Sunday Morning Link Love 9/8/7 (cool date!) | I've Paid For This Twice Already... Sun, 09 Sep 2007 14:49:35 +0000 http://www.financialdominance.com/what-is-the-4-rule/#comment-290 [...] Dominance: What is the 4% rule? I learn something more about retirement from Brian every day. I had heard of this 4% thing but now [...] [...] Dominance: What is the 4% rule? I learn something more about retirement from Brian every day. I had heard of this 4% thing but now [...]

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