$1 Million just doesn't go as far as it used to!

I just saw this article from Bloomberg today...

https://www.bloomberg.com/news/articles/2017-08-21/how-far-does-1-million-savings-go-in-retirement-state-by-state

It doesn't have to be that way.

The common "Rule of Thumb" used to be the "4%-Rule". You can take out about 4% of your savings each year and expect your savings to keep up with inflation and ride the ups and downs of the market. But here's the problem: 4% of $1 Million is only $40,000 per year. Worse yet, most financial planners now use 3.5% given the market volatility of the last 20 years.

And what if that money is in a traditional 401(k) or IRA?

You'll be paying income tax on every dollar you withdraw from your retirement fund. That takes $40,000 down to  a net of $30,000 if your effective tax rate is 25%. Many of the people I talk to every day have no Income goal in mind. They are blindly saving and have no idea what it will mean in terms of Income when they retire.

Articles like this highlight this huge problem. If $1 Million won't last long, what's in store for the millions who don't have anywhere near that much tucked away?

This traditional way of thinking is precisely the reason I founded Innovative Retirement Strategies. 99% of financial professions pitch the same basic financial products: Bankers have CDs; Insurance agents want to sell you annuities; and "Wealth Advisors" want to sell you securities. They would like you to think that this is all there is to choose from.

But what about Real Estate? Here on Bigger Pockets we know that the 4%-Rule doesn't hold for real estate investments. What about financial alternatives like secured private lending opportunities? How many "Traditional" financial professionals will incorporate alternatives into their financial plans? They are more likely to try talk you out of it. It means lower commissions for them!

The 4%-Rule only holds in the "Traditional" world with "Traditional" investment choices. If you can't live on 4% of your savings, maybe its time to look for some Innovative Retirement Strategies.

Related: 4%-Rule Analysis. https://www.youtube.com/watch?v=mnFdtNLPBys