Does the 4% Rule Hold During 2022's Stock Market Crash?

Stock market crashes aren't good news for anyone. For retirees though, this dip in prices can feel like a death wish, as active income is no longer an option. Have the hopes and dreams of financial flexibility gone out the window? Or is a market crash like we're experiencing today just a small blip on a retiree's radar? Pairing this with inflation, how will someone who has just retired make it?We’ve got Michael Kitces, retirement planning expert and financial genius with enough acronyms coming after his name to spell out the alphabet, on the show to answer whether or not retirees are in trouble. Michael has advised his clients for decades on the right way to save and invest for retirement. He’s been a proponent of the 4% rule and was bold enough to hold his claim even during the flash crash of 2020. But, with such high inflation and stark drops in equity values, does he still agree with his past predictions?Michael takes us on a trip down memory lane, visiting some of the worst financial crises in American history, showing how they compare to today. He also proposes that holding large amounts of cash, even during high inflationary times, isn’t the worst move to make, and whether or not he’s still investing as the market finds its bottom. If you’re worried about retiring during times like today, this is the man to listen to!
In This Episode We CoverThe 4% rule explained and whether this sage retirement advice still holds upHow past retirees fared during high inflation, low growth time periodsWhich types of market crashes can be “dangerous” to retirees (and who should be worried)Why some of the brightest minds in personal finance are clinging to cash Purchasing power and how withdrawal rates are affected by high inflationThe smartest move to make if you’re worried your retirement savings aren’t enoughAnd So Much More!
Links from the ShowFind an Investor-Friendly Real Estate AgentBiggerPockets Money Facebook GroupBiggerPockets ForumsFinance Review Guest OnboardingMindy's TwitterScott's InstagramListen to All Your Favorite BiggerPockets Podcasts in One PlaceApply to Be a Guest on The Money ShowPodcast Talent Search!Subscribe to The “On The Market” YouTube ChannelListen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPocketsCheck Out Mindy’s 2022 Live Spending Tracker and BudgetBuckingham Wealth PartnersBill Bengen (The Inventor of the 4% Rule) Talks Retirement, Past Crashes, and How You Can Withdraw Even More!Original Article from the Journal Of Financial Planning, October 1994Are FIRE Naysayers Bad at Math? Yes. with Michael Kitces
Click here to check the full show notes: https://www.biggerpockets.com/blog/money-351
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