Forget the 4% Rule? Retirement Expert Says Take Just 2.8% a Year — Even With 90% of Your Money in Stocks

Retirees should consider withdrawing no more than 2.8% of their portfolios each year to reduce the risk of running out of money in retirement, an expert says.

Bridgeway Capital Management CEO John Montgomery takes a more conservative approach to retirement withdrawals than the traditional 4% rule, recommending a 2.8% annual withdrawal rate while keeping 90% of a portfolio in stocks and 10% in bonds, Business Insider reported Friday.

Montgomery Favors a Lower Withdrawal Rate

Montgomery’s strategy combines a lower withdrawal rate with a much higher stock allocation than the traditional retirement portfolio.

“A 90/10 portfolio will produce 6.5% inflation-adjusted returns, while a 60/40 portfolio will deliver 4.8%,” Montgomery told the publication.

Forget the 4% Rule? Retirement Expert Says Take Just 2.8% a Year — Even With 90% of Your Money in Stocks

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