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Why the 4 percent rule shouldn’t be a rule

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In the debate over whether it is better to base a retirement income withdrawal rate on predictable historical returns or one that focuses on basic retirement needs, it appears that the jury is still out.“Do you want to focus on the probability of failure or the magnitude of failure?” said Wade Pfau, associate professor of economics at the National Graduate Institute for Policy Studies.Mr. Pfau, who has championed the conversation over new ways to manage a retirement income portfolio, presented his food for thought yesterday in Chicago at the InvestmentNews Retirement Income Summit.