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The Decumulation Drawdown: How spending became the big dilemma in retirement

For much of their adult lives, Americans have worked, planned and worried about saving enough money for retirement. They’ve diverted income to 401(k) accounts, consulted financial planners and learned to invest. But as they reach the promised land of retirement, many baby boomers are confronting a dilemma they have not considered.

Retirees have to make sense of spending their assets responsibly while ensuring that money lasts them the rest of their lives. The process of converting a lifetime of savings into retirement income is fraught with complexity, especially as inflation pressures mount and Americans live longer.

But retirees are developing different strategies and concepts to meet the challenge, retirement income specialists say. A whole field of retirement income planning is evolving into a separate specialty within the financial advice industry. There’s more customization involved in retirement income planning, as opposed to relying on the stock market to generate enough returns in a portfolio, or using outdated, and often contested, guidelines like the 4% rule, which has traditionally dictated how much money a person should take out of their retirement accounts every year.

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