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However, as author Jonathan Clements explores here, there are five popular withdrawal strategies you can leverage while adhering to two key rules: avoid overspending and don’t sell stocks during market downturns. They include:

📌 Four Percent Rule: Withdraw four percent of the initial retirement portfolio in the first year, adjusting for inflation annually. To weather market downturns, keep 5–10 years’ worth of spending in conservative investments.

📌 Fixed Withdrawal Rate: Withdraw a fixed percentage (e.g., five percent) of the portfolio’s value each year. Spending adjusts with portfolio performance, ensuring funds never run out.

📌 Required Minimum Distributions (RMDs): Apply government-mandated RMD percentages to all accounts. This strategy ties withdrawals to life expectancy, offering a structured approach.

📌 Emptying Buckets: Divide investments into three buckets with varying risk levels (low, medium, high). Use dividends, interest, and sales from higher-risk buckets to refill low-risk ones, ensuring spending stability.

📌 Setting a Floor: Cover fixed expenses with guaranteed income sources (e.g., Social Security, annuities). Use a separate pool of more aggressive investments for discretionary spending.

Key Takeaways: Your “best” withdrawal strategy will depend on personal preferences and emotional comfort, as no single method is universally “superior.”