What Is the 4% Rule for Taking Income From an IRA or 401(k)?

As a financial strategist and retirement planning specialist for more than 46 years, Doug Andrew has fielded a lot of questions. Each week, he answers many of these questions on his 3 Dimensional Wealth YouTube channel. The question he zeroes in on for this episode is, what is the 4% rule as it relates to retirees?

In today’s episode, he explains what the 4% rule is, why it came about and why he thinks it’s pretty pathetic that it is the financial services industry standard for people have money in traditional IRAs and 401(k)s.

Doug has two very specific problems with this rule. One is that the money is essentially trapped in the account and the second is that it is at risk because it is in the market rather than tied to the market. He explains the difference between planning for retirement and the kind of planning needed once you’re at retirement.

If you’re serious about enjoying liquid assets safely earning a predictable rate of return, this is a message you need to hear.


  • How did the 4% rule come about and why do so many financial advisors still cling to it? Doug explains how the financial services industry often has a vested interest in having you keep your money in the market.
  • What is the difference between investor returns and investment returns? Doug spells out the difference between those two terms and why it’s so important you be able to distinguish between them.
  • Why do so many retirees find themselves coming up almost 33% short on their expected yearly retirement income? Learn why Uncle Sam claims roughly a third of whatever money they take out and how you can avoid this.
  • Why is tax-free accumulation a better way than tax-deferred savings? Doug explains the advantages of getting those taxes over and done with and enjoying tax-free accumulation from then on.
  • How can you avoid the dangers associated with market volatility? Doug reveals the solution to having your money at risk in the market so you don’t lose money when the market declines.
  • Are you at risk of outliving your retirement savings? Doug points out that many people are going to learn the hard way and how you can ensure that your nest egg is never depleted.
  • And much, much more…

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment.

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