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By Mark Forman on October 16, 2018

Stone in Advisor Perspectives: Think Differently about Retirement Income

William Bengen’s 4% rule is approaching its 25th birthday. In the nearly three decades since his discovery of the safe withdrawal rate, much has happened. We’ve navigated the tech boom, and the housing bubble of the last decade, and are new riding a ten-year bull to new highs. Until last week!?

A recent survey from the American College of Financial Services revealed that 7 in 10 consumer respondents weren’t even aware of the 4% rule. 16% thought the safe withdrawal rate to be more like 6 or 8%. For RIAs charging a 1% fee, that 4% is more like 3. Given all of the above, it’s time to think differently about creating sustainable retirement income streams.

And since there’s a direct correlation between interest rates, and the value of these guaranteed withdrawal benefits, the math may be getting even better. As interest rates rise, these guarantees promise to grow more generous.

While your fixed income investments may be suffering in this rising rate environment, your ability to manage longevity risk and market risk may only improve. What today is a 5% guaranteed withdrawal could grow even higher—further outpacing a 4% withdrawal regime.

Read the article at Advisor Perspectives→

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1Variable annuities available on the RetireOne platform do not assess surrender penalties. Because fixed indexed annuities on the platform charge no fees, contingent deferred sales charges (surrender penalties) may be assessed if the money is withdrawn from the policy during the surrender period.

Insurance policies are sold by Aria Retirement Solutions, Inc. doing business in California as Aria Insurance Solutions, Inc. (San Francisco, CA), a licensed insurance agency (CA License #0H44773). Aria distributes certain insurance and variable annuity contracts that are issued by insurance companies not affiliated with Aria. Insurance policies may not be available in all states. Information on this site may not yet be approved by the Departments of Insurance for use in all states.
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