For decades, many financial planners advising retirees have recommended using the 4% rule.  It states that if you withdraw 4% of your portfolio each year in retirement, your nest egg could last 30 years or longer.  The problem is, if you enter retirement when the stock market is tanking and start withdrawing 4% each year while we are in a bear market, your portfolio may evaporate very quickly.  Some investment advisors are now recommending taking out less than the 4% in down markets and more during good markets.  San Francisco financial advisor David Yeske uses rules based on research done by Jonathan Guyton and William Klinger in the 200’s and he says that because of its flexibility, his clients are able to take out 5-6% in good years. However, in down years there will be some belt tightening so retirees need to figure out which expenses they can cut during down years.

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