Ep. 92: Safe Withdrawal Rates - Accounting for Inflation

The notion of a 'safe withdrawal rate,' being a real amount that can be taken out of savings in retirement each year without a significant risk of running out of money in some window of time, goes back to a 1994 paper by Bengen which enshrined the "4-percent rule." In this podcast, the Inflation Guy discusses improvements to that rule - including some that he popularized - especially when it comes to the need to add some inflation-proofing to an asset mix that needs to keep up with inflation! The IG still prefers personal liability-driven-investing, but investment do-it-yourselfers who like rules of thumb need to know that there are easy ways to improve on the 4% rule...and some not-so-obvious pitfalls in using it blindly!

The Inflation Guy also responds to an excellent listener email about last week's episode.

 

NOTES

Podcast callback: Ep. 91: Quality Adjustment (?) in College Tuition Inflation

The Inflation Guy's Society of Actuaries paper: Maximizing Personal Surplus: Liability-Driven Investment for Individuals

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