Bloomberg Businessweek

Living on 4 Percent—Or Less

Early retirees share their secrets to make the money last | “I definitely don’t want to go back to working in a corporation”

The “4 percent rule” is a bedrock of retirement planning. But does it apply to those who quit working before 65? The rule of thumb holds that retirees who spend only 4 percent of their investment portfolio annually, adjusted for inflation, will be able to stretch out their savings for the rest of their life. For example, a $1 million brokerage account gets you $40,000 a year to spend.

Lately, the 4 percent rule has been under assault, with experts warning that the future could bring weaker market returns, an increased life span, or both. “If you retire at 40 with a couple million dollars, you’re going to worry—about financial emergencies, taxes, inflation, market crashes, and the chance you’ll live a

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