The 4% Rule says we can spend 4% of our investments in the first year of retirement, adjust that amount each year by inflation, and our money should last at least 30 years. But did you know that it assumes we pay nothing in investment fees.
And if you pay an advisor 1% a year to manage your portfolio, you’ll need to reduce your spending by 10%.
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While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I’m the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
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@Random-ld6wg
why doesn't it drop all the way down to 3% in the first yr for someone implementing the 4% rule and has a 1% AUM fee?
@Ashkn965
My bank charges $25 per trade. Gotta keep it one per month or so with good lump or I'm screwed lol
@alphamale2363
Like Bogle said, "In investing, you get what you don't pay for".
@matthewbegin3462
I feel like you need to look at how much you may need when you are 90 years old. I will be spending way more at 66 than I will at 85.
@noyopacific
Accounting for a 1% advisor fees I'd think you'd need to reduce your withdrawal rate by 25 % from 4% to 3% to account for that 1% fee?
@boby115
In the 1st 10 years they take incrementally 10% ( 1% + 1%+1% +1%+1%+ 1%+1%+1%+1%+1%) ; plus your missing out on the work that 10 % could have made you over that 10 years.
@kimappreciateslife
No advisor for me! They do nothing but try to sell you products with commissions. No one cares about your money as much as you do.
@70qq
ty
@watzup8700
Nice shirt Rob
@troboboulware8518
Anyone know how much Ed Jones is?
@richardthorne2804
4% rule is the wrong approach. Please consider GenexDivendedInvestor for a better way to retire. It’s worked for me.
@truckingmoney485
No reason to have an advisor
@BearPapa49
I’d rather keep
My pension and invest into CD s and not pay an advisor . I can invest in a CD for a
Nice 4 years and get 5% !
@lambertois11
Annuity is an option to consider.
@johnfijnvandraat
That's why I look at it from stance of 2% of total value or balance of dividends paid is what you should plan for then you will definitely have enough to cover your expenses
@johnpaulpm
So how can you avoid that?
@karimelzein9115
Watch Common Sense Investing's video on the 4% rule it covers this exact topic in-depth
@dc1741
I handle my own money. I'm a retired engineer so working with numbers is no big deal.
@Moped_Mike
Is that 10% only for the first year? Or is it 10% of 4% ongoing?
@ChloeBensonBeautyBoxes
Why can’t you just subtract the fee from your 4%?
@VIDAS_TEAM
This exactly what I have always though .. no one account for that 1-2% management fees
@ltmsimply
That’s why I manage my own and teach others to do the same🎉!! 1% defiantly adds up in 30 yrs
@jeffrice3044
Manage your own or at worst go with low cost providers like Vanguard and Charles Schwab.
@jmc8076
Googled but no info. Most retirement articles are written by/with advisors tho LOL. Pd ~1.3% in past so looks right. In Cda % of fees claimable on tax. You and others inspired husb and I to try DIY. Prepping now. Too bad you didn’t do any Maple content but US a lot of work I’m sure.
@jiyadavi
I retired last month. Having a bucket system really helps me remain calm during the recent volatile mrkt, the only problem
is I still have over $1 million of mortgage debt. I can easily get rid of it if I sold some liquid assets. Do you think it's better to
prioritize paying down the mortgage or keep my money working in the financial mrkts?
@MoneyVikings
Good to know, thanks!
@hannahmanager7646
Then please do a video on how to avoid these fees
@baybay7898
When my husband started his first job, he selected an advisor to help him set up the accounts 403b and via Nationwide Financial. It wasn’t until 8 years I started realizing the fees were 1.3% plus.85% mutual funds charge adding up to 2.1% annually. I switched to TIAA Cref right away however the existing balance with nationwide couldn’t be moved to TIAA Cref due to the surrender charges. We had to wait a few more years to get out of the contract. Financial industry is ripping off people. I am glad I learned their greediness and moved to the right decision before it’s too late.
@Bobventk
Rob is half as smart as he thinks he is
@AlanSiegel-y1c
Recently my wife and I just sold two real estate properties for a total sum of $800k. We plan to purchase a new house next year, but the cash is just sitting in our joint savings account What do you recommend we do? I would appreciate any suggestions.
@jasonhawk2717
Love these Berger shorts!
@car348fed
Dear Rob and fellow subscribers,
I need some assistance with the following questions:
Where can I find the complete calculation of an ETF/Mutual Fund's performance based on its portfolio?
How can I view the full performance of an ETF/Mutual Fund before deducting fees, expenses, and other costs?
Where can I find detailed information about fees and expenses?
If a target fund shows an expense ratio of, for example, 0.12%, and the fund's composition includes investments in several other funds, sometimes from third-party companies, where can I find the expenses associated with these underlying funds?
Thank you for your help, and I apologize for my lack of knowledge on this topic.
@computerhelpcc
UBS is effectively 1.8%. Getting off that train while market is still high. Insurance co fin advisor charges .67.
@ncooty
It would probably be clearer for most people to say 3.6% rather than 10% less than 4%.
@ncooty
This doesn't quite say what fee rate or structure was assumed for the 4% rule.
@ncooty
The math here doesn't seem to line up. A 1% fee on AOM is like a 1% headwind on total gains. Are you saying the 4% rule is that sensitive to a mere 1% difference in total gains? What am I missing here?
@dominic8218
The 1% they take is a complete rip off. I was ripped off for 5 years and thought that money would be better in my pocket! If my money went up they got 1%. If my money went down, they still got their 1%!!!
@jazzman3968
Wouldn’t you have to reduce your spending by 25%? You can spend 4% of your assets with the rule, but 1% of your assets is going to the money manager. So, you’ve reduced your spending from 4% to 3% (down 25%).
@designmorsels
Love this!
@RoninKurosawa
Another way to look at this is that you're paying your advisor 25% of your annual income.