When we do retire, we do tend to spend more during those initial years. And because of that, we try an calculate just how much is enough so we won’t outlast our funds. This is often based on the 4% rule, an initial distribution that is adjusted upward as retirement continues based on inflation.
Because no one, not even the actuaries know how long we will live, whether we want to perserve some of those funds for our heirs, what the tax rate will be over those years and whether inflation will begin to rise significantly, this decision is incredibly difficult to make, even when you are close to retirement.
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