If you’re planning for retirement, one of the best-known rules for making your money last may not work for everyone.
A recent Prudential survey found that 54% of retirees would rather leave money behind for heirs than risk running out of money during retirement.
"People get to retirement and they're so emotionally invested in the balance that they are having trouble pulling the money out and they are not living the life that they saved for as a result," said Jean Chatzky, author and AARP personal finance columnist.
For decades, the so-called “4% rule” has suggested that retirees withdraw about 4% of their savings each year. The rule assumes a mix of stocks and bonds and is based on historical returns.
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According to MoneyWatch, the 4% rule for annuities can help compare income options, highlight the value of longevity protection and call attention to inflation and flexibility.
But new research highlighted by KVIA suggests a more personalized approach could produce better results.
That could mean combining investments with other income sources, including annuities. However, annuities aren’t right for everyone.
The takeaway: Consider your expenses, taxes and flexibility instead of relying on a single percentage to guide your entire retirement strategy.
