What is Drawdown?

A drawdown percentage is the portion of retirement assets that a retiree withdraws each year to pay for their needs and wants expenses.
The 4% rule states that retirees should with-draw 4% of retirement assets each year to live on so that R1 million would equal R40,000 in annual income. The 4% rule is supposed to maximize one’s chances of having enough money to last through to the end of one’s life and is based on a 1994 study by past financial planner William Bengen. His study used stock market data, and average investment returns to deter-mine that 4% was the highest percentage that an individual could withdraw so that their retirement money could last 30 years.