The 4 Percent Rule, also known as the Rule of 25, comes from a study at Trinity University into retirement planning and economic theory.1 The authors took price data from the stock and bond markets through all of recorded history. Pretending there was a retiree starting with a bucket of cash, they simulated what would happen if she withdrew a certain percentage of her portfolio every year, leaving the rest invested. They counted how many retirees made it to the end of their retirement with their cash intact, and how many ended up broke and dying alone in an alley surrounded by empty cat food
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