When it comes to retirement planning, one of the biggest concerns for most individuals is making sure their money will last. After years of saving and investing, the last thing anyone wants is to run out of funds during their golden years. One strategy that can greatly help in ensuring financial stability in retirement is determining the sustainable withdrawal rate.
What is a Sustainable Withdrawal Rate?
A sustainable withdrawal rate refers to the percentage of funds that can be safely withdrawn from a retirement portfolio on an annual basis, without depleting the principal. This rate takes into account a number of factors, including the projected lifespan of the retiree, inflation, investment returns, and any other sources of income or expenses.
