I doubt the "16.62% rule" will become as common as the "4% rule" often cited in discussions about safe withdrawal rates. It is true that on one level, Pfau's work merely reinforces the old advice that the best time to start saving is today. However, I look forward to the additional research I hope this lifespan approach may generate. Like the late Lynn Hopewell's "Decision Making Under Conditions of Uncertainty: A Wake Up Call for the Financial Planning Profession" and Bill Bengen's series on safe withdrawal rates, I hope this is the next Journal of Financial Planning contribution that leads to additional research and expands our body of knowledge.
Dan Moisand, CFP, has been featured as one of the America's top independent financial advisors by most leading financial advisor publications. He has spoken to advisor groups on five continents on topics such as managing investments and navigating tax complexities for retirees, retirement readiness, and most topics relating to the development of the financial planning profession. He practices in Melbourne, Fla. You can reach him at 321-253-5400 or dan@moisandfitzgerald.