Constant Dollar ¶
The Constant Dollar is one of – if not the most – well-known withdrawal strategies. That's because it's the strategy used in the studies that derived The 4% Rule.
- It ensures that your quality of life stays consistent, as it adjusts annual withdrawals for inflation
- Reasonably high rate of success (depending on asset allocation, length of retirement, and initial withdrawal percent)
- Spending is not reduced when the economy is doing poorly, increasing likelihood of running out of money
- Spending is not increased when the economy is doing well, so you can sometimes end your retirement with a considerable amount of money