When thinking ahead about how many assets you need to be putting into your retirement, what different percentages you use will depend on your overall financial planning. The 4% rule is one that is often used as a guideline for a comfortable retirement. A Wall Street Journal argued, however, that folks who live by this 4% rule may be at risk of going broke due to the chances of increasing longevity and long-term care.
The 4% rule is a long-established recommendation about how much retirees may be eligible to safely withdraw from their retirement plan every single year. A financial planner from MIT initially developed the financial rule associated with 4%, meaning that you would pull from your initial retirement assets and then increase that amount every year to reflect inflation. Having a comprehensive estate plan and financial plan for your future is the only way to guard against the potential downsides and obstacles that you may face after you have left the workforce and no longer have the eligibility to pull in income in other ways.
Even if you have enough set aside for retirement, you must factor in how long-term care planning may influence your ability to live longer and a healthy life in retirement. Just one long-term care event can have repercussions for years in terms of having enough money to continue.