"Retirees Can Safely Withdraw More with Higher Bond Yields"
The 4% rule, a guideline for retirement withdrawals, may finally hold true as a safe starting withdrawal rate, according to a report by Morningstar. Amid higher bond yields and moderating inflation, retirees can feel comfortable drawing down more in their first year than in previous years. Morningstar's analysis found that in 90% of simulations, withdrawing 4% in the first year and adjusting for inflation thereafter left money in the account after 30 years. However, the 4% rule only considers investment portfolios and not other sources of income like Social Security or pensions. It serves as a simplified guideline while experts continue to debate the best approach for retirement withdrawals.