, Columnist
How to Stop Inflation From Wrecking Your Retirement
Old rules, like spending 4% of your assets each year, were simple but wrong. Retirees need a more versatile strategy to provide a stable income.
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Inflation is why the 4% rule never made any sense.
I've always found it strange that we put one of the most complex and difficult financial problems on senior citizens. After you retire it's very hard to know how to invest and how much to spend each year. You must plan around many unknowns, how long you’ll live, what you’ll need to spend on health care and what will happen to markets. Saving while working is the easy part, but spending down a retirement nest egg is much, much harder, and leaves much less margin for error. It also gets much less attention from the finance industry and policy makers.