RBS 052: How Investment Fees Lower Retirement Spending (and invalidate the 4% Rule)
The 4% Rule of retirement spending is used to plan spending in retirement. The rule says you can spend 4% of your nest egg in the first year of retirement. In subsequent years you adjust the amount by the rate of and inflation. Following this approach gives you a ver good chance of not running out of money in retirement. The 4% Rule, however, assumes no investment fees. Add even a small amount of fees and your spending in retirement must go down. Add 1% or more in fees, and retirement spendi...