The 4% rule has long been a cornerstone of retirement planning, specifically helping to address

the question of how much can I expect to spend for my portfolio each year while still being

reasonably assured that that money is going to last for maybe the next 30 years or so to support

me throughout retirement. But what are we supposed to do when we have a big, unexpected expense

in our retirement? Maybe we have our perfectly

planned budget, but then we need to repair the roof, or then the car breaks down, or then

there's some major expense, how do we reconcile that with this 4% rule that helps us understand

how much we can take out each year? That's exactly what we're going to discuss on today's

episode of Ready for Retirement. This is's episode of Ready for Retirement.

This is another episode of Ready for Retirement.

I'm your host, James Knoll, and I'm here to teach you how to get the most of the life with your money.

And now, on to the episode.

Today's question comes from my listener named Sherry.

Sherry submits this question.

She says, hi, James, I really appreciate your show in the way you break financial concepts down into easily digestible nuggets. My question is how to

think about large expenditures in retirement. What happens when a large expense comes up,

like a new roof, septic system, or car purchase? Does this count as part of that year's 4%

withdrawal? Or do you create some kind of

sinking fund for such items ahead of time? If our withdrawal is $125,000 per year, a $25,000 new

roof is a substantial piece of the budget. Thank you for your guidance and how to wrap our heads

around this important piece of the retirement puzzle, Sherry. Well, Sherry, thank you for that

question. I think this is something

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