Beyond the 4% Rule: Building Your Custom Retirement Engine

Is Your Retirement Plan Built to Last—or Just Built to Work?

For decades, the "4% rule" was the gold standard. The idea was simple: withdraw 4% of your savings each year, and you’d likely be fine. But let’s be honest—life isn't a math equation, and your retirement shouldn't be either. 

The way we save for retirement (accumulation) is a completely different animal than the way we spend in retirement (decumulation). To build a plan that actually lets you sleep at night, we need to move past "one-size-fits-all" and start looking at your retirement as a combination of different building blocks. 

1. Build Your "Safety-First" Floor

Think of this as your financial foundation. Before we worry about market growth, we need to make sure your basic lights-on expenses—housing, groceries, utilities—are covered no matter what the stock market does. 

The Tools: Social Security, pensions, or annuities. 

The Goal: To manage "longevity risk." That’s just a fancy way of saying we want to make sure you don’t outlive your money. 

2. Use Bonds as Your Shock Absorbers

While stocks are great for growth, they can be a bumpy ride. Bonds act as the suspension system for your portfolio. 

 Stability: Bonds provide steady income and help balance out the zig-zags of the stock market. 

Diversification: History shows that mixing stocks with bonds significantly reduces the risk of a catastrophic loss compared to owning stocks alone. 

3. Create a "Volatility Buffer"

One of the biggest risks in retirement is having to sell your investments when the market is down just to pay your bills. We call this "sequence of returns risk," but you can think of it as "bad timing risk." 

By keeping some "buffer assets"—like cash or other stable sources—you can spend from those when the market is acting up. This gives your main portfolio time to recover so you aren't selling at the bottom. 

4. Find Your RISA® Style

At the end of the day, the "best" plan is the one you can actually stick to. This is where the Retirement Income Style Awareness (RISA®) framework comes in. 

Do you prefer the peace of mind that comes with Safety-First contractual protections? Or are you more comfortable with a Probability-Based approach that relies on market growth? By aligning your income sources with your personality, you move from a mindset of "hoping it works" to a plan that feels right for you. 

Ready to Build Your Custom Plan?

If you have retirement assets and want to see how these building blocks fit your specific style, let’s talk. We can help you build a strategy that’s as unique as your retirement goals.

Click here to schedule your 15-minute Retirement Fit Call.
 
Let's make sure your retirement journey is as secure and fulfilling as you envision.