Student Loans vs. Compound Interest Account by Curtis Ray

When you're ready to retire, your financial advisor will say something like this. " Okay, great! Let's see how much you can safely withdraw from your accounts to live on each year!" He or she will likely be applying the well-known, income-crushing 4% RULE (or trap as I like to call it). Here are some examples of income based on the 4% rule:

Account Value | Withdrawal Amount
$1,000,000 = $40,000/yr
$500,000 = $20,000/yr
$250,000 = $10,000/yr

With this rule in place, you're forced to downsize, which means to give up a lot of what you're use to so you can retire. The financial advisors will tell you that by then, your house will be paid off, you won't have any other debts like cars and student loans, so 4% will be enough to live on. But the reality is, very few people find themselves in this ideal place and still have many expenses to pay for as part of their normal daily life. The limited income provided by the 4% rule leaves little to no room for the dreams they had of what retirement would be like.

It doesn't have to be this way. Find out how you can increase your retirement income by up to 4X! Check out my new book "The Lost Science of Compound Interest" --that explains all this and more at CompoundInterest.com

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