Aug 28
Beyond the 4% Rule: Creating Retirement Spending Guardrails That Really Work By John Manganaro - ThinkAdvisor
Monte Carlo simulations have become the dominant method for conducting financial planning analyses for clients, and they represent an important advance over previous planning frameworks with less predictive power, such as the ubiquitous 4% withdrawal rule.
However, such simulations ultimately capture what one planning expert calls an “outrageous and potentially misleading” spectrum of outcomes, and clients often have trouble accurately interpreting the “probability of success” metrics such analyses generate.
