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What they’ve come to find out is that that strategy, the 4% rule, actually has a high percentage of failure. Matter of fact, it’s a 56% failure rate. So, think about this. The Wall Street Journal, the Harvard Business School of harvest, Harvard School of Business has come out and they said, Look, if you follow this 4% rule, there’s up to a 56% chance that you’re planning to fail.
People are investing for growth; people are investing to accumulate dollars. They’re not making the transition to an income strategy, which is completely different than accumulating your dollars and growing your money. And so, it’s one of the most overlooked areas. And I think it’s because for the longest time, my industry has taught people that if you have an investment portfolio, a diversified investment portfolio of stocks and bonds, that you could keep that money invested.
In the Roth portion, the 401k. If I want to pull all $100,000 out, I can do that tax free, if that were to go in the traditional portion, right, if that were to go into the traditional 401k portion, that $15,000 grows to $100,000, I pulled out all of that $100,000 counts as the income tax.
And once people understand the areas that they need to focus on, and they understand the best practices that they need to make sure that their portfolio is having, they get a sense of peace, right? There’s a peace of mind that comes with having a thorough plan. And that’s the whole goal. You know, I jokingly say to, you know, my team at secure money advisors, I said we provide sleep insurance.
I mean, you know, typically the people that are coming into our office are wanting to make sure, you know, as they get closer and closer to that retirement date, that they’re invested properly, right. So, they want to continue to make adjustments to make sure if we saw that 2008 scenario, they don’t significantly take three steps back.
And it’s something that we adhere to pretty much on point that secure money advisors, basically what it means is you take your age, so if you’re 60 years old, 60% of your money should be safer, more conservative 40%, you want for more aggressive, more risk for long-term growth.
