Episode 192- Beyond The 4% Rule

In this episode of Retire with Style, Alex Murguia and Wade Pfau dive into key retirement planning topics, including sequence risk, the 4% rule, withdrawal strategies, and bond yields. They highlight the importance of a comprehensive financial plan that accounts for asset allocation, tax considerations- such as those related to TIPS and annuities- and the role of dynamic, risk-based guardrails. The discussion underscores how retirement income strategies must adapt over time to meet changing needs.

Takeaways

• Sequence risk is a critical factor in retirement planning.


• The 4% rule may not be applicable in all scenarios.


• Bond yields significantly impact sustainable withdrawal rates.


• Fixed percentage withdrawal strategies can mitigate sequence risk.


• Dynamic risk-based guardrails offer a flexible approach to spending.


• Financial planning is essential for effective retirement income management.


• TIPS are less tax-efficient than other bonds and should be placed in tax-advantaged accounts.


• Asset allocation should be tailored to individual risk tolerance and retirement goals.


• The traditional 100 minus age rule for asset allocation is a simplification.


• Retirement strategies should adapt as circumstances change.

Chapters

00:00 Introduction and Conference Insights

02:11 Exploring Sequence Risk and Spending Strategies

03:35 Understanding the 4% Rule and Bond Yields

10:19 Fixed Percentage Withdrawal Strategies

14:06 Dynamic Risk-Based Guardrails for Spending

20:06 The Role of Financial Planning in Retirement

27:18 Tax Implications of TIPS and Asset Location

29:56 Evaluating Stock-Bond Allocation Strategies

Links

Join Our Next Live Q&A Session!

We’re hosting our next Retire With Style YouTube Live Q&A on Monday, August 25th at 2:00 PM ET. Wade and Alex will be answering your retirement planning questions live!

✅ Submit your question in advance at retirewithstyle.com

✅ Or join us live and ask your question in the chat

Come be part of the conversation- your questions often inspire future episodes!

📺 Subscribe to the Retire With Style YouTube Channel to be notified when we go live!

Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it!

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips