The 2.7% Rule for Retirement Spending

Is the 4% rule really 2-3%?

Referenced in this video:

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[cat-.-]

Instead of letting your lifespan, an unknowable, influence your withdraw rate, we might also consider a novel approach where you let your portfolio depletion event inform your end-of-life timing. This eliminates all risks and is a favorable strategy.

[theoisme]

Thanks, ive adjusted my calculations and now retire comfortably at 106 👍

[mattlm]

"Wow, you're a millionaire? You are rich!"
"Yes, I'm off to enjoy my 27k a year"

[jellovendigar]

Thank you Ben for making me fearful of my own longevity risk

[davec]

But this information makes me angry, so it must be wrong.

[insomniacsupremacy]

As an aspiring Pl. Fin., your videos and investing philosophy are THE most helpful on YouTube

[nerdistry]

10:30 Love the bullet-riddled bomber pop-up on survivorship bias.

[michaelwiebeck]

I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.

[FR-ncvb]

Hi Ben, I just wanted to say that your videos are outstanding and you deserve more recognition. Your videos made a huge difference in my view on investing and I sincerely want to thank you for providing all this information. Wishing you the best!

[fsmoura]

The two papers mentioned in the video, but not listed in the video description:
Choi, James J. "Popular personal financial advice versus the professors." Journal of Economic Perspectives 36.4 (2022): 167-192.
David Blanchett, C. F. P. "Exploring the retirement consumption puzzle." Journal of Financial Planning 27.5 (2014): 34.

[OnmywaytoFI]

I plan on using financial guardrails which adjust spending based on market returns along with having a cash buffer for down years. Couple that with a well diversified portfolio including value, blend, growth, reits and bonds and a 4-5% withdrawal rate for 40 years is doable. Then throw some part time work in and you are golden. Many different models show this is possible. Of course we cannot predict the future but don’t be afraid to spend money in retirement. Much more than 2.7%

[Ateszika]

is there a Hair Growth ETF - looks promising

[randolphh]

The assumptions on age are wrong for the elderly! I agree on the need to consider a slightly lower withdrawal rate to make it 30 years. BUT, he minimizes the fact that he is talking ONLY about the portfolio. There are other sources of income outside the portfolio primarily Social Security and hard assets such as your home.
Planning for the 95th percentile of longevity is folly. 65 plus 30 is 95! For older folks be aware that life expectancy has been declining not increasing. I don’t know anybody that is 95 years old. When I was working in geriatrics till last year, meeting a 100 year old was as frequent as meeting a celebrity. I know lots of people in my circle dead by 75 and 80. How many homeless people do you know who are 90? They don’t exist.
The reality is that for almost all couples one person will be dead by 85 which is a 20 year horizon, then spending drops a lot due to age and being single. Sure healthcare can rise at the end of life, but it does not need to be self funded, so it is often not relevant, in fact those without a surviving portfolio will receive care for “free” while those with a portfolio will be asked to self fund!. Most seniors live on only Social Security when they are old, so any portfolio balance is nice, but not necessary when very old.
I’m not advocating for not having savings, just for keeping it real and not scaring people so that they die with large portfolios because they were too afraid to enjoy their money while they were alive! You don’t need a 100% chance of success. 80% is probably fine for most.

[JerryLuca-nmru]

For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our

[MrBigWig]

A video about the superior variable spending rules would be great 😇

[marianahenriquez]

This is a good example as to why rules in finance need to be analyzed, and considered in the present time, rather than blindly followed. Thank you Ben for your thorough analysis

[DarnellsStevenses]

As a soon retiree, keeping my 401k on course is my top priority. I have been reading of investors making up to 250k ROI in this current crashing market, any recommendations to scale up my ROI before retirement will be highly appreciated.

[dforrest]

I think if you use some guardrails, your withdrawal rate could be about double that. Use it during the “go-go” years when you can enjoy it!

[MrJozefP]

Ben, I cannot thank you enough for the value your channel provides. My favorites videos are 'picking stocks' and 'bear markets'. Remind me of how I used not to unserstand the absolute basics :) You most probably saved my retirement, and definitely saved the present me a lot of doubts and time. Greetings from Poland, Merry Christmas!

[livelucky]

How did I just now find out you have a podcast... 200+ episodes for me to catch up on at work. Hell yeah!