The Buzz From Washington - May 2025
We highlight some significant retirement-related legislative and regulatory activities that could have an impact on workers, plan sponsors and their providers.
Are “safe” initial withdrawal rates, such as the “4% rule,” still the best guide for retirement spending? We believe it’s time for a change. Our research offers a fresh perspective on portfolio withdrawal rates by integrating spending flexibility (i.e., dynamic withdrawals) and an outcomes metric that better captures the anticipated retiree sentiment regarding various potential outcomes. Our model goes beyond the basic metrics, which often only measure success or failure, to introduce a series of portfolio withdrawal rates that we believe are a better starting place for retirees – what we call PGIM DC Solutions’ “guided spending rates.”
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