Percent of Portfolio ¶
The percent of portfolio withdrawal strategy allows you to spend a constant percentage of your portfolio each year.
For example, you may choose to withdraw
4% of whatever your portfolio is valued at each year. If your portfolio starts at
$1,000,000, then your first year withdrawal will be
$40,000. Later on, if your portfolio dips to
$430,000, your withdrawal for that year would be
- Never prematurely runs out of money
- Spending is adjusted based on market conditions
- High year-over-year variability in your withdrawals. When the market does poorly, your annual withdrawal may be quite small. And likewise, your withdrawals may grow sharply when the market does well.