Safe Income Withdrawal Rates During Retirement
When you started saving for retirement, you were told you could save up a big pile of money, use the earnings for retirement income, and leave the same exact pile of money to your beneficiaries. This probably won’t happen, because the world and the financial markets have changed, along with Safe Income Withdrawal rates.
In the 1980’s the Safe Income Withdrawal Rate was 6 percent, meaning you could take 6 percent out of your assets every year for income, and you had a 95 percent probability you wouldn’t run out of money. In the 1990s the Safe Income, Withdrawal Rate dropped to 5 percent, and starting in 2000, it dropped to 4 percent. In the 2010s the Safe Income Withdrawal Rate dropped to 3 percent.
And now, there is a rumor the Safe Income Withdrawal Rate will drop to 2.5 percent. Meaning that if you have one million dollars saved, you could only take out 25,000 dollars of income safely. If you’ve been a good saver and have accumulated a significant amount of retirement assets, the Safe Income Withdrawal Rate has dropped over 50 percent from the time you started saving.
If you want to learn how to maximize the income from your assets – and guarantee it for life- contact us today.
916-791-7063
You might also like to learn more about our book Momma’s Secret Recipe for Retirement Success
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