It’s time to challenge ‘rules of thumb’ retirement income levels

By Lora Benson | May 03, 2017
What’s the new sustainable income rate in retirement? One in five people taking a ‘rule of thumb’ yearly retirement income of 4% will run out of money in 30 years.

What’s the new sustainable income rate in retirement?

The ‘4% rule’, developed by US adviser William Bengen in 1994, has often been turned to as a rule of thumb for determining a sustainable level of retirement income. However, our research - developed with leading actuarial firm EValue - found that in today’s economic climate, a 65 year old entering drawdown in a low risk portfolio, taking 4% of the initial amount each year, has a one in five chance of running out of money within 30 years.

Headlines

  • One in five people taking a ‘rule of thumb’ yearly retirement income of 4% will run out of money in 30 years.
  • We set out a new sliding scale when considering sustainable income level, from 1.7% to 3.6%.
  • Report highlights the importance of personalised financial advice regarding income rates.

You can find out more about this important subject in our ‘What’s the new sustainable income rate in retirement?’ report.

Why not speak to your Aegon representative to find out how we can help you understand this complex area and discuss the retirement income solutions we offer?


Aegon UK offers retirement, workplace savings and protection solutions to around 2,000,000 customers, and employs approximately 2,100 staff. Revenue generating investments totalled £59 billion as at 31 December 2014.

As an international life insurance, pensions and asset management company, Aegon has businesses in over 25 markets in the Americas, Europe and Asia.

Aegon are the only multi-channel platform provider in the UK, servicing the workplace, advised and direct markets.

With award-winning digital retirement services, Aegon was named one of the 30 most innovative companies in the UK in the Market Gravity Innovation Insider Index 2015.

Visit www.aegon.co.uk/advisers for more information.