4% Rule
I’m at an age where I ask myself, what will retirement look? Where will I live? What kind of lifestyle will I be able to afford? Will I truly be financially independent?
I consider myself a pretty average American 401(k) investor. In my 20’s, I took the advice of some wise boomer co-workers. I started contributing to my retirement account. Truthfully, I didn’t fully understand how the system worked. I just knew the game was supposed to be long-term. Buy, hold, and trust the process.
And I did. Through the ups and downs, through market crashes and rallies, I stayed the course. But now, with retirement starting to peek over the horizon, I find myself asking… Now what?
As a Fidelity customer, I dug into some of their advice (link below). They frequently mention the “4% Rule.” It is a guideline. It suggests that if you withdraw 4% of your retirement savings each year, your money should last you throughout retirement.
Sounds good, right? But let’s break that down. If you have $500,000 saved, 4% equals just $20,000 a year. And that’s with 90% certainty that you won’t run out.
Honestly? I felt a little gut-punched. My younger self thought $500k would mean a comfortable retirement, not scraping by on $20k a year. Reality check: it’s not enough.
So here’s the real question — how do we close the gap?
How do we save more? How do we invest smarter? How do we plan better? We need these strategies so that we’re not just surviving in retirement, but actually living.
It’s not too late. Not for me, not for anyone willing to start now. Small, consistent steps today can completely change the story tomorrow. Time to get serious. Time to plan. Time to build a future that doesn’t just get me across the finish line — but lets my family thrive for generations to come.
Let’s get to work.
Foundation Builders 