Joseph Heller wrote his American Classic ‘Catch-22’ in 1961 and the book title has become the catch phrase for a a paradoxical situation from which an individual cannot escape because of contradictory rules. There are Catch-22’s in the investment world, particularly when it comes to retirement income.
In this video, Rob Brinkman, explores the Catch-22 as it relates to the 4% Withdrawal axiom in our current environment where the 10-Treasury is trading well below that. In a case study he demonstrates a Bucket Strategy, using a combination of Immediate Annuities and Deferred Annuities to accomplish the income goals of a 70-year old retired couple.
The dilemma today is that why you are working in your big earning years (40’s, 50’s, and 60’s) and accumulating savings and retirement accounts, many never think ahead to what interest rates will look like when you actually retire. For instance, the 4% withdrawal rule worked so well for so many years because you simply part much of your retirement savings into a safe treasury bond or even a CD (many years ago) that would easily guarantee 4% or more.
However, in today’s low interest rate environment, the 4% rule has imploded as it is impossible to find a short term guaranteed rate of 4% or more.
To watch, just click on the video picture below (you can make it full screen by clicking on the button on the bottom right corner).
To learn more from this professional, click here (Rob Brinkman).
P.S. – Please share this article with others by simply clicking on the blue social media icons at the top of your screen!
Annuity123 does not offer insurance, investment, or tax advice. You should always seek the guidance of qualified and licensed professionals concerning your personal insurance, investment, or tax matters. Annuity123 is simply a platform allowing retirement planning professionals to help educate the community on various retirement planning topics. Annuity123 does not directly support or take responsibility for ensuring the accuracy of the content displayed in the articles themselves or any feedback that may get added in the Comments section from the community.