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  • Writer's pictureDavid H. Kinder, RFC®, ChFC®, CLU®

Investments will LOWER Your Potential Retirement Income! (Safe Withdrawal Rate)

Updated: Jan 18, 2023

About 4 years ago, Morningstar Research, Inc., adjusted their recommendations of a 4% "safe" withdrawal rate... to a 2.8% "safe" withdrawal rate.

Morningstar: Time for the 3% Withdrawal Rule?

Chicago Tribune: The Journey: Study Warns 4% retirement rule is no longer safe

Morningstar: What History Says About Safe Retirement-Withdrawal Rates

ThinkAdvisor: Wade Pfau: Coronavirus Tears Up 4% Rule

What does this mean? It means that, if you're using "traditional" investment portfolios or portfolio management services to manage your retirement portfolios for income... you're safest bet is to only withdraw 2.8% per year to ensure that your money will LAST as long as you do!

Out of $1,000,000 portfolio, that's only $28,000 per year!

Please note: In all these studies, "success" is defined as having $1 left at age 90. So we're not talking about having a growing retirement portfolio! We're talking about avoiding being poor in retirement and losing our dignity!

Why so little income? It's due to the nature of long-term bond rates being so low, demographic spending (we have an aging population), and uncertainty in our stock markets. I'm not an economist, but I'll let Tom Hegna explain the situation as to why we're in such a low interest rate environment and how it won't be changing any time soon:

Now, let me add a little "lemon juice to the papercut":

Won't you be paying either investment broker sales commissions OR an advisory management fee of about 1.5-2.5% for you to "enjoy" only 2.8% of your money each year?

For a $1 million portfolio... you'd be paying $15,000 to $25,000 per year... to enjoy just $28,000 per year???


This is a question I ask everyone about their financial planning:

Which person would you rather be? Person A vs Person B?

  • Person A has $2 million dollars

  • Person B has $1 million dollars

Based on that information alone... which person would you rather be? We'd pick Person A because there's more money, right?


  • Person A's $2 million portfolio can generate $60,000 a year FULLY TAXABLE

  • Person B's $1 million portfolio can generate $60,000 a year TAX EXEMPT

Now which person would you rather be?

Key wealth concept:

*** Where your money is... is more important than what it earns. ***

But that's not all: Let's talk more about Person B's retirement asset:

  • Not subject to filing a tax return with tax-exempt cash flow (no 1099 form)

  • No state taxation

  • Does not cause Social Security Retirement Benefits to be subject to taxation

  • No additional charges on Medicare/IRMAA premiums

  • No stock market volatility

  • No investment advisor management fees

What if there was a BETTER way for some, most, or all of your retirement income assets?

What if there was a way to enjoy almost TWICE the money each year and for the REST OF YOUR LIFE ?

What if you didn't have to PAY ADVISORY FEES (which, over 10 years would add up to 20-25% of your portfolio)... in order to ENJOY that income!

None of this is theory or "pie-in-the-sky". You can guarantee a worry-free retirement income for you and your family TODAY by using today's life insurance and annuity wealth and retirement contracts!

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