Today’s Hack
The 4% rule gets talked about like gospel in retirement planning. But let’s be honest, it’s always been more of a rough guess than a golden rule. Now, its original creator is revising it to 4.7%. So, does that mean your retirement paycheck just got a raise, or is this just another headline that oversimplifies a complex decision? In a world of volatile markets, tax surprises, and rising longevity, the idea that one percentage could work for everyone isn’t always the best default approach.
In this episode, Phil unpacks the hype behind the new number and explains why withdrawal rates are more of a starting point than a strategy. He dives into the overlooked factors that shape retirement income planning, including taxes, market volatility, and your unique timeline. Income planning is an essential piece of a successful retirement and this will help you understand how we help people figure out how much they can really withdraw from savings without running out of money.
Here’s some of what we discuss in this episode:
🔍 What the original 4% rule really was and why it went viral
❓The “new number” everyone’s talking about
💰 The critical difference between gross and net withdrawal needs
⏳ How timing, market swings, and income sources impact sustainability
📊 Why planning beats rules of thumb, especially in volatile times
0:00 – Intro
1:07 – What is the 4% rule?
2:56 – Why 3% was actually more common
4:18 – What’s the “new number”
7:14 – The gross vs. net income trap
10:55 – How to calculate your withdrawal rate?
13:01 – Importance of having a personalized plan
If you have any questions about what we discussed in this episode, reach out and we’ll be happy to set up a time to talk.
Get your copy of The Tax-Smart Retiree: https://www.thetaxsmartretireebook.com/welcome