The average retirement portfolio pays $8,000 per year

The 4% rule suggests retirees can withdraw 4% of their savings annually without running out of funds. For someone with a 401(k) valued at $216,000, this provides just $8,640 a year—an amount that may not be enough to cover living expenses and rising healthcare costs.

This limited income can leave many retirees financially strained, especially if unexpected expenses arise. Supplemental income, such as Social Security or part-time work, often becomes necessary.

To address these challenges, it’s important to diversify investments and plan beyond the 4% rule. A well-thought-out strategy can help ensure financial stability throughout retirement.