Make Sure You Use This Withdrawal Strategy As Soon As You Retire

One of the most commonly asked questions I receive is, what should my withdrawal strategy be in retirement? In this video, you'll learn how to withdraw funds in retirement most effectively.

⏰ TIMESTAMPS
00:00 - Introduction
1:23 - How To Recreate Income
3:24 - The Guardrails Approach
5:39 - Guyton's Guardrails Rules
9:22 - Inflation
10:50 - Capital Preservation Rule
12:14 - Additional Considerations
14:43 - The Importance of Framework
16:07 - How Much Is Enough?
16:28 - Working With Us

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[janethunt]

This was a great explanation. I think you convinced my husband that we won't go broke by taking more than 4%.

[luisg.classen]

James, just wanted to let you know that you have the gift of taking complex and abstract topics and putting them in an easy to understand and digest language via analogies. Keep doing the great job you do educating us. Awesome job!

[CheckThisOut]

Basically: Sell high. Sell stocks/other assets when they are higher. This helps fight the “buy high/sell low” trap (which is very easy to fall into).

P.S. This guy is one of the best on the subject of Retirement. ‘Highly recommended.

[MatrixMatched]

What an excellent step-by-step summary! I feel more confident in concentrating on the things I can control - less worry

[Banthah]

Terrific video.
I’m from the UK and what I like is that iths applies to anyone, anywhere, and is not just USA specific.
I have 5 years to retirement and I have watched a number of different videos on withdrawal methods. But this is the first one that gives a specific order from your portfolio, based on returns.
Thanks for this, very helpful

[dlg]

A dynamic withdrawal strategy like this is absolutely the best way to go if you can stick to it.

[jennifernguyen]

James, thanks for the informative video. Could you please do a video that takes Guyton's Portfolio Management Rule and incorporate tax efficient strategies and considerations of the types of accounts (taxable vs. tax deferral)?

[williamrogers]

This is about rebalancing via withdrawals (i.e., withdrawing the higher asset class up to including the desired asset allocation) However one would assume if one asset class increased significantly to the desired asset allocation, the portfolio would have been previously rebalanced based on the trigger method of rebalancing.

[janethunt]

Watching this again after becoming a good student of your videos AND my husband actually entering retirement. Thank you!

[DB-xppx]

great video. what is lost here (probably cuz the answer is, as always, "it depends") is how many year's worth of cash reserves u should have to pull from in the years both bonds/stocks are down. most bear markets only last 2-3 years, if i remember correctly, but we have longer stretches such as 2000-2010

[jrcll]

i`m 62.... retiring next yerar, S/S at that age is not quite enough so i`m pulling from my 401k for 3 to 4 years, its the whole reason i put 15- 16 % into 401k all those years until S/S payments are adequate... also have a SPIA annuity kicking next april that will give me 659.00 a month

[kzalaska]

Great explanation of a relatively complex idea. I am retiring in one year and plan to use this strategy.

[brownwellson]

Protecting your capital is much more important than making money. Basically because if you lose your capital, making money is much harder. ''Missing the train'' vs. ''losing your money''. There are a lot of trains, but if your money is gone, it's over.

[ppw]

I actually understood! Thank you for your very clear explanation. You’re very much appreciated. Thank you for your great work.

[dforrest]

I like the rules presented in the video, with one caveat. The first place I’m taking money beyond my pension when I retire is dividends and capital gains from taxable assets, since those I’ve already paid taxes on. Second is cash. In good years I’ll replenish the cash with excess capital gains instead of reinvesting them all like I do now. Only about two years away!

[jeffwoodruff]

That Pepperdine U diploma must be in education. Best presentations on the internet. Thanks!

[mechthildhaeussler]

The best explanation of this important but often hard-to-understand approach I have ever watched, great work. Unfortunately very relevant regarding current markets. I will "sort of" implement it - only "sort of" because at the same time I am applying an allocation glidepath according to M. Kitces (meaning to increase my equity allocation slowly but steadily in the first 10-15 years of retirement). As matter of fact, the only tweak to the Guyton rules is in the definition of "excess" which is evolving from year to year.

[robynnichols]

Great explanation. I have heard of the guardrail rule but never heard it explained this way!

[Pierceb]

Your videos are concise nd to the point. This is the most helpful one for me.
Where I get confused is you for example plan on drawing 4% and the prior years inflation was 3% and it was an up market do you withdraw 7% or do you mean 4.03%
. Then do revert to 4% plus the following years inflation rate?
Some white boars examples over several successive years with associated dollars would really be helpful to me.

[johnyjsl]

Thank you for your clear explanation James.