The 4% rule suggests the total amount a retiree must withdraw from their retirement savings each year.
The rule aims to create a stable and secure income stream that will meet the retiree’s current and future financial needs.
The rule was created using historical stock and bond returns over a 50-year period from 1926 to 1976. Some experts believe that 3% is a safer withdrawal rate at current interest rates; others think 5% might be ok
Life expectancy plays an important role in setting a sustainable course.