Sign up with your email address to be the first to know about new products, VIP offers, blog features & more.

The Danger of Taking Too Much

One of the most frequently asked questions regarding retirement income deals with the withdrawal rate.  “ How much can I take out?”. Below is the best chart I’ve seen that illustrates the damage that can be done if a retiree takes out more than 4% per year.

withdrawal rate



Disclaimer: * Hypothetical value of assets held in a tax-deferred account after adjusting for monthly withdrawals and performance. Initial investment of $500,000 invested in a portfolio of 50% stocks, 40% bonds, and 10% short-term investments. Hypothetical illustration uses historical monthly performance from January 1972 through the most recent year from Ibbotson Associates: stocks, bonds, and short-term investments are represented by the S&P 500® Index, U.S. intermediate-term government bond, and U.S. 30-day T-Bills, respectively. Initial withdrawal amount based on 1/12 of applicable withdrawal rate multiplied by $500,000. Withdrawals are inflation adjusted. Subsequent