On October 24, 2022, precisely a year ago, we published an article by Allan Roth in Advisor Perspectives, The 4% Rule Just Became a Whole Lot Easier. The idea for that article came from a conversation that Allan and I had. I noted that real rates, as expressed by TIPS, were about 1.75%. I thought that it would be possible to lock in the proverbial 4% safe withdrawal rate. Allan did the analysis and found that, indeed, a 4.36% safe withdrawal rate was possible. That article received widespread attention throughout the financial media. Perhaps it even had a role in the introduction of BlackRock’s new suite of defined-maturity TIPS ETFs.
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