By David Rodeck
From Kiplinger’s Personal Finance
The 4 percent rule is the best-known retirement withdrawal strategy.
William Bengen, a financial adviser, came up with this rule in a famous paper published in 1994. He reviewed how long a portfolio in a tax-deferred account would last on returns ranging from 1926 to 1976.
He found that retirees in all these scenarios would have their savings last at least 30 years if they took out 4 percent in their initial year of retirement and adjusted the dollar amount for inflation every year thereafter. For example, if you retire with $1 million, you would take $40,000 out for your first year of retirement. If inflation was 5 percent, in year two you would adjust and take $42,000 out….