Many were already looking at a reduction in the 4% rule and it seems it might be dropping significantly. The good news is there are other ways to prepare for this using different tools and planning. We often see a focus on net worth in retirement but it is actually cash flow that is most critical. Then we also need to look at how that cash flow will be taxed. Money in a qualified plan will not only have a reduction in what you can withdraw safely each year but also taxation consequences to consider.
Excerpt from this article. The implications are huge and potentially devastating. Under the 4% rule, a $1 million 401(k) would allow you to spend an inflation-adjusted $40,000 each year in retirement with minimal odds of outliving your money. With the new rule, you would be able to spend an inflation-adjusted amount of just $19,000 per year.
