This week, David is joined by John Little to discuss an important topic. David and John talk about a recent published study titled "The 4 Percent Rule is Not Safe in a Low-Yield World." The study argues that advisers make a grave mistake in basing their clients retirement plans on historical returns that may be an anomaly.

Some highlights from the study:Investment companies often include in their disclosures that "past returns do not guarantee future results" but to the study's co-author, Michael Finke, says that's not just rhetoric. "We're trying to acknowledge what present reality looks like and apply that reality to the retirement income plan", Finke says. There is no reason to believe that the market for assets in the 21st century is going to look like the market for assets in the 20th century.

"Most planners take some comfort in knowing that the 4% inflation-adjusted withdraw rate wouldn't cause a retiree to run out of money in a 30-year retirement. Previous studies that supported the 4% rate used historical yield data that don't look anything like what new retirees are facing today."

The study concludes that the probability of a retiree running out of money is very real and many financial planners are setting up their clients to run out of money.

Recomended Reading: (Access the articels below by going to "Extras" from your David Lukas Show Iphone or Android App. 

Advisor One: 4% Reitrement Rule is DeadMarketwatch: Stocks dead, bonds deader till 2022: PimcoChicago Tribune: Study Urges Caution With Retirement Funds

You can reach David and John at: 501-218-8880 or online at: InfiniteFinancialServices.com