The Rational Reminder Podcast

Episode 362 – AMA #7

54 snips
Jun 19, 2025
In this engaging session, the hosts tackle the tough realities of sticking to investment portfolios. They critically analyze the 4% rule alongside the implications of fixed versus variable retirement withdrawals. Behavioral challenges during market downturns are discussed, highlighting the need for discipline. Listeners learn about the pitfalls of bank-sold structured products and the skepticism surrounding trend-following strategies. The conversation beautifully intertwines financial planning with life fulfillment, making for a thoughtful exploration of investing.
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INSIGHT

Safe Withdrawal Rates Are Lower

  • The traditional 4% withdrawal rule drops to around 3% for early retirees with 100% equities over long horizons due to global data and inflation adjustment.
  • Longer retirement horizons cause higher failure rates when using fixed withdrawals without adjusting risk.
INSIGHT

Variable Withdrawals Boost Spending Potential

  • Amortization-based withdrawals vary each year and average a higher spend rate but include very low spending years in tough market periods.
  • Variable withdrawals increase spending potential but are emotionally difficult for retirees due to annual uncertainty.
ADVICE

Stay Disciplined With Automation

  • Automate investments or use an advisor to stay disciplined and maintain your risk level during market volatility.
  • Avoid tactical asset allocation shifts, as consistency is more important than chasing short-term market timing.
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