This Strategy Guarantees You Won't Run Out of Money in Retirement -- But Can You Pull It Off?

Many retirees fear running out of money, which was highlighted in a 2024 Allianz survey. To mitigate this risk, a recommended strategy is to adhere to an interest-only withdrawal plan, where retirees pull from only the earnings of their investments, preserving the principal. The widely recognized 4% rule allows 4% withdrawals annually but does not ensure durability of funds. In contrast, the interest-only strategy can offer greater security for a retirement portfolio, particularly when a substantial initial nest egg is established.

If you only withdraw the earnings on your retirement investments, you can protect your principal and potentially avoid running out of money.

The strategy of only withdrawing the income portion of your portfolio is known as an interest-only strategy, which can ensure your savings last longer.

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