"The 4% rule is one of the most common rules for setting a safe withdrawal rate. If you follow it, you take 4% out of your investment accounts the first year and adjust each year for inflation. This gives you around a 90% chance of your money lasting for at least a 30-year retirement."
"Assuming you do, you could withdraw $12,000 per year from your retirement savings of $300K, and have a fairly solid chance of your money lasting."
"While that's not a fortune, it may be enough for you, depending on what you were earning before leaving work, if your spouse has income, the cost of living in your area, and whether you have housing expenses or live in a paid-off home."
The median retirement savings for households aged 65 to 74 is approximately $200,000. Having $300,000 saved is better than average, but concerns about longevity of funds are valid. The sustainability of a $300K nest egg largely depends on the withdrawal rate. The 4% rule suggests withdrawing 4% annually, adjusted for inflation, which offers a 90% chance of lasting through a 30-year retirement. Living expenses and additional income sources, like Social Security, also influence financial stability in retirement.
Read at 24/7 Wall St.
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