Is the 3.3% Rule Re...
 
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Is the 3.3% Rule Replacing the 4% Rule?

 

Pizza Man
(@giovanelli766)
Trusted Member Customer
Joined: 1 year ago
Posts: 50
Topic starter  

Morningstar issued a research paper claiming that the “safe” withdrawal rate from tax-advantaged retirement portfolios could be as low as 3.3%, due to the high valuations of financial investments. William Bengen, inverter of the 4% rule, responded to the Morningstar paper and highlighted some weak points in their conclusions:

https://www.advisorperspectives.com/articles/2021/11/29/is-it-now-the-3-3-rule


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Bill Hines, Retirement Planner
(@hines202)
Estimable Member Customer
Joined: 1 year ago
Posts: 101
 

I think we're all better off if we treat these as guidelines, not "rules." I think it was misnamed from the start. I like that Pralana gives you some input to say "Rather than blindly taking 4% a year for the rest of my life, I'd like to have more fun/spend more in my earlier, healthier years, because I know when I'm 85 I won't be doing as much." On top of the huge advantages of timing and amounts of withdrawals from different taxable, nontaxable, and deferred tax accounts and the power of conversions along the way.

Bill Hines
Investment Advisor/Financial Counselor/Retirement Planner
Emancipare Investment Advisors LLC
https://emancipare.com
bill@emancipare.com


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Pizza Man
(@giovanelli766)
Trusted Member Customer
Joined: 1 year ago
Posts: 50
Topic starter  

I meant to say William Bengen was the inventor of the 4% rule, not the inverter... 😫 I agree that "rule" is the wrong word. My point is it was disingenuous for Moriningstar to release such a "research report". At first blush it appears to be nothing more than an attention grabber, click bate; shame on them. Fortunately PRC users are intelligent and wise enough to do their own literature search and review/compare the various musings from supposed "experts 🤡 " in the field. Hopefully this forum can be a source of sanity 🤠.


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