The 4-per-cent rule is a way to establish how much income retirees can safely draw from their savings. It was the brainchild of a financial adviser named William Bengen, who wrote about it in 1994.

Under this rule, a retiree with a $1 million IRA would withdraw 4.7% in the first year, or $47,000. After that, Bengen said the percentage is no longer used.

Jeet Dhillon, senior portfolio manager at TD Wealth Private Investment Counsel in Toronto, says she tries to steer clients away from some of the investing rules of thumb, like the 4-per-cent rule.

Origins of the 4% rule Financial adviser Bill Bengen’s seminal 1994 paper arrived at a safe withdrawal rate of four per cent by back-testing various withdrawal levels against historical market return ...

According to Schwab, the 4% rule says that you should add up all of your investments and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar ...

As mentioned above, the 4% rule is designed to help people's savings last for 30 years. But if you're retiring early, you may need to stretch your nest egg for 35 years, 40 years, or longer.