One of the most fundamental rules in the world of investments is the so-called 4% rule. Although it is a strategy known to most investors, there are certain psychological risks associated with it that can be difficult to overcome. Essentially, the 4% rule states that if one invests their entire portfolio in the S&P 500 continuously and withdraws 4% annually, they will never run out of money.
However, although the possibility of running out of money is very low, there is always a certain associated risk. For this reason, many investors opt for the 2-3% rule, which offers a higher degree of reliability.