Financial planners have leaned on the four percent rule, which means- withdrawing 4 percent the first year, followed by subsequent withdrawals depending on inflation. Financial Advisor, Derrick Kinney, says this number was said to be the most acceptable amount of money to live on.
“The problem is the market has gotten dramatically more volatile, inflation worries, recession worries, the war- all these things- if you’re taking too much out- its sort of like planting flowers in the ground. Once you pull them out, they’re not going to grow back right away.” Kinney said.
He says to speak to an advisor, if you can, and consider taking out 2.5 to 3 percent.
Now, Kinney says people want to go and get out and do activities, spending more than when they were working.
“The key is to live on a practiced retirement budget, so you know almost exactly how much money you can live on and you can plan for that. If you test it ahead of time, you can see if you need to work longer. The worst thing retirees can do- is spend so much money in the first couple years of retirement- that they must drastically reduce now what they spend later, robbing you of the joy of retirement.” He said.
According to a February 2026 AARP report, 7 percent of retirees have “unretired,” or reentered the labor force. Forty-eight percent said their primary reason for returning to work is to make money, with the desire to stay active a second distant, at 14 percent.
The financial advisor says there are 2 things to be aware of to set yourself up for success. "Once you know when you want to retire and in today's dollars how much will you need to spend. You can always future value it and advisor can help you with this. If you do those 2 things well, you are likely to have a solid retirement, and the odds of you running out of money go down dramatically." Kinney said.