With rising interest rates, retirees may consider withdrawing only the interest generated by their savings instead of touching the principal. This approach alleviates the common fear of depleting retirement funds, as avoiding principal withdrawal can ensure financial longevity. While the 4% rule allows for both principal and interest withdrawals, living solely on interest can be more secure. Portfolio income strategies include investing in dividend stocks; however, these do carry risks that could affect principal. High-yield options available today support this possible strategy.
One of the biggest fears Americans have regarding retirement is running out of money, regardless of whether they start with $600,000 or $4 million.
Living on interest alone may be doable in today's high-rate environment, allowing retirees to avoid touching their principal.
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