Glenn Ruffenach
speaker
110 appearances
2 recordings
1 series
first heard Oct 2019
last heard Oct 2021
Glenn Ruffenach’s voice in public audio — every appearance, attributed to the second.
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Appearances
But that figure really took the industry by storm.
No one really had established a figure like that before.
And it became the starting point for a lot of people on how to withdraw money from their savings.
Ah, so with required minimum distributions, that's something that a lot of people are familiar with.
When you hit age 72, the government would like you to start pulling money from your savings.
They want you to pull money from your savings.
And the IRS has set up a way to do that.
They have the math all ready to go.
And you can use that same system, RMDs, or required minimum distributions, with your nest egg as a whole at any point in retirement.
And now what we're doing, instead of pulling that solid 4% every year, the RMD is tied to a variable.
In this case, it's tied to your life expectancy.
So you're going to start off with smaller withdrawals, but they'll get larger as you get older.
RMD is one example of something called dynamic spending strategies or dynamic spending withdrawals.
In other words, you want to tie your withdrawals to some variable such as market performance.
If the markets are doing well, you might be able to take a little bit more from your nest egg each year.
If markets are doing poorly, you might have to cut back on your withdrawal.
Again, this is all in contrast to the well-known 4% rule, where you're taking that same figure every year and adjusting for inflation, and it tends to ignore how your nest egg itself is performing.
I think so.
I think that's exactly right.
And that's why some people are not big fans of the 4% rule.
Showing 21–40 of 110 · page 2 of 6
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