With inflation causing stress in all age groups, here are some reassuring words for retired people concerned by warnings that they should only be tapping 3% instead of 4% of their portfolios: Keep calm and spend on.
Of course, this doesn¡¯t apply to a lot of retirees, but the sort of person who worries about appropriate withdrawal rates is probably diligently saving for retirement, or already has. A bigger problem, according to financial advisers, is that too many of their clients don¡¯t actually spend enough of the money they have squirreled away. They¡¯re so paralyzed by the risk of depleting their savings, they scrimp more than they need to.
It¡¯s a good reminder of how retirement planning depends on emotional factors that are separate from the risks associated with, say, inflation or lower bond returns. A lot more goes into estimating how long you¡¯ll live or how much you want to leave to your children than algorithms and actuarial tables.
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