Retirement planning can be daunting, especially when it comes to figuring out how much you can safely withdraw. The 4% rule has long been a popular guideline, but as you approach retirement, the nuances become more important.
Dynamic Safe Withdrawal Strategy
At Betterment, we understand the complexity of determining a safe withdrawal rate. That’s why we’ve developed a dynamic safe withdrawal strategy tool within our app. This tool considers various factors like market conditions, inflation, and life expectancy to provide you with a personalized projection for safe monthly withdrawals in retirement.
How Betterment Can Help
For Betterment customers, our Goal Forecaster tool is a valuable asset in retirement planning. By projecting different spending scenarios in retirement, you can gain a clear understanding of your financial outlook.
Interested in seeing how it works? Create a new Retirement Income goal in your Betterment account and access the tool under “Projections.” Enter your retirement savings amount, adjust the life expectancy age, and get a personalized projection for a safe monthly withdrawal.
As you approach retirement and begin utilizing your savings, we recommend reviewing your safe withdrawal rate annually and consulting with tax and financial advisors to optimize your spending plan based on your unique circumstances.
Defining “Safe” in Retirement
While most safe withdrawal strategies aim to prevent running out of money, your definition of “safe” may differ. Consider factors like leaving a legacy for your family or charity when determining your withdrawal strategy.
Adjust your withdrawals accordingly to align with your financial goals and values. Play around with different scenarios until you find a comfortable balance between enjoying your retirement and securing your financial future.