David John MarottaDavid John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com
Host: What is a safe withdrawal rate during retirement?
David Marotta: Because you are planning on a long life, it's important that you not take too much of your assets out during retirement. They did a study of people at age 65, what percentage of their assets could they withdraw each year, adjust that amount upward for inflation and not run out of money before they die. What they found is, they did an extensive study and they found that 4% is safe, 5% is not safe. So 4% looked like there was enough room, you had enough growth, 5% there was a good chance you were going to run out of money before you died.