Why the 4% retirement withdrawal guideline may not suit every saver

If you are mapping out retirement, one of the best-known rules for making savings last may not be the right fit for everyone.

A recent Prudential survey found that 54% of retirees would prefer to leave money to their heirs rather than take the chance of outliving their savings.

“People get to retirement and they’re so emotionally invested in the balance that they are having trouble pulling the money out and they are not living the life that they saved for as a result,” said Jean Chatzky, author and AARP personal finance columnist.

For decades, the so-called “4% rule” has advised retirees to withdraw around 4% of their savings each year. The guideline is based on historical market returns and assumes a portfolio mix of stocks and bonds.

MoneyWatch says the 4% rule for annuities can be useful for comparing income choices, showing the value of longevity protection and drawing attention to inflation and flexibility.

Still, research highlighted by KVIA points to a more tailored approach that may work better.

That may involve pairing investments with other sources of income, including annuities. Even so, annuities are not suitable for everyone.

The main lesson: Weigh expenses, taxes and flexibility rather than depending on one percentage to shape an entire retirement plan.