3 scenarios where the famous 4% rule could leave you broke in retirement

3 Scenarios Where the 4% Rule Breaks Down

1. You retire too early- like in your 50s.

The 4% rule was built for 30-year retirements - but retiring at 55 means your money needs to last 40-plus years instead.

That extra decade increases your sequence-of-return risk and inflation exposure, making 4% withdrawals far less reliable over time.

2. Your portfolio is too conservative.

A bonds-only portfolio has only a 65-70% success rate at 4% withdrawals compared to 90-95% for balanced portfolios.

With long-term bond yields averaging just 4% as of December 2025, conservative allocations simply can't generate the growth needed to keep pace with inflation over multiple decades.

3. You face large one-time expenses.

Long-term care costs or major health emergencies can derail any withdrawal strategy - even one that looks safe on paper.

The 4% rule assumes steady, predictable withdrawals, but real life rarely cooperates with that assumption.

The 4% rule is a good starting point but the best way to see if you’re on track to retire and grow your net worth is to create a financial plan with the help of a CFP.  To learn more, schedule a complimentary call with me through the scheduling button.

-Ken Hoyt, CFP®