Ask the experts

How much can I safely spend in retirement? Is it really just 4% per year? --Randie Kreutzer, San Dimas, Calif.

The rule you're referring to -- which says you should spend 4% of your savings the first year of retirement and boost that by the inflation rate each year -- has been recommended so often that it's acquired a seemingly unshakable aura of authority.

But in fact it's really just a guideline based largely on computer simulations showing that if you follow this regimen, the probability of your savings supporting you for at least 30 years is relatively high.

Yet there's an inherent flaw -- this rule imposes a series of predictable-as-clockwork withdrawals on a portfolio that will probably be invested in assets whose value can fluctuate greatly. And that can lead to potential pitfalls, like coming up short if the market crashes or living an unnecessarily austere life if stocks perform better than expected.

If you want reasonable assurance that your savings will last at least 30 years, limit yourself to an initial draw of between 4% and 5%. But after settling on an initial percentage, take your cues from the markets and your balances. If your nest egg takes a hit, especially early on, scale back withdrawals until your portfolio rebounds. If the loss is small, forgo your annual inflation increase. If it's substantial -- say, more than 10% -- reduce the size of the withdrawal.

Conversely, if your portfolio's value swells, that's a good time to treat yourself to that cruise, help out the grandkids, or indulge in some other long-delayed but well-deserved splurge.

Check your progress by going to a tool like T. Rowe Price's Retirement Income Calculator. Plug in your age, portfolio value, and your current level of spending, and you'll see the probability of outliving your money. --Walter Updegrave

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