I’m working pretty hard to build up a retirement nest egg. I often spend extra hours hammering away at my desk to top up my long-term savings, and I’ve given up some luxuries, like a bigger home, to afford consistent retirement contributions.

Because of this, I really want my nest egg to last as long as I need it to. So rest assured that when I retire I won’t be taking random withdrawals. I’d rather have a plan.

Image source: Getty Images.

But that plan won’t revolve around the famous 4% rule. And you might want to consider an alternative solution if you’ve been told to follow the 4% rule yourself.

Why the 4% rule doesn’t work for me

Let’s start by reviewing what the 4% rule means. It basically says that if you withdraw 4% from your IRA or 401(k) plan balance your first retirement year and adjust subsequent withdrawals to match the rate of inflation, your nest egg should last 30 years.

That’s quite a comforting thought. But I also know that the 4% rule doesn’t work for me in practice.

One problem I have is that the 4% rule presupposes yours pension plan split fairly evenly between stocks and bonds. While that sounds like a reasonable asset mix for someone heading into retirement, I’m not sure that’s exactly what my portfolio will look like.

The 4% rule also assumes that your expenses will remain the same throughout retirement – hence the adjustments for inflation and nothing more. But I don’t expect that to be the case.

I’m actually hoping to spend more money in the earlier stage of retirement, as I assume I’ll be in better shape at that point to enjoy different experiences. And I also assume that at some point I will have to replace a car, fix a roof, or cover another costly unplanned expense. I need a withdrawal strategy that builds in that flexibility.

You may want to look at different options

I’m not saying the 4% rule doesn’t work for everyone. But I don’t see it working for me.

Instead of committing to virtually the same withdrawal rate throughout retirement, I’d like to come up with a system that builds in more wiggle room. I also think that if it’s a year where I don’t have unplanned expenses or big plans, I’ll take out significantly less than 4% of my nest egg to buy myself space.

I also don’t intend to look after my nest egg on my own. I already work with a financial advisor to manage some of my portfolio, and I intend to turn to a professional for guidance on how to extend the savings I’m working hard to accumulate. You may want to do the same, even if you are a financially savvy person.

Overall, the 4% rule is a simple solution for managing retirement savings. I’m not going to tell you that you will go wrong by following it. But what I will tell you is that coming up with your own plan may not only better serve your needs, but allow you to enjoy retirement even more.