I would feel comfortable using the 4 percent rule, especially if it is supplemented by a pension or Social Security income, and it is adjusted for inflation. I think using the CPI to adjust the payouts for inflation is too conservative because you can usually modify your spending to reduce the inflation impact. For example, if the cost of beef goes up, then you can eat more chicken. My conservative diversified portfolio has an average return of about 6 percent over the past 30 years or so.
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