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Unpacking the 4% Rule for Retirement-Portfolio Withdrawals Retirees need to understand the assumptions behind the 4% withdrawal rule so they can use it successfully, according to this article on Morningstar. The term "withdrawal rate" may not be accurate since the 4% could be provided by income generated by bonds and dividends, capital gains distributed by mutual funds and sale of securities. Yet, the 4% withdrawal rate will not be always sustained through asset allocation especially if investors are ultraconservative. A right mix of stocks and bonds is most likely to provide sustainability in the long term. -- Morningstar

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