(NewsNation) — Nearly half of U.S. retirees lack a formal strategy for withdrawing their retirement savings, according to a survey by IRALOGIX.

Financial experts say this could lead to long-term financial consequences, but outline several proven approaches.

4% rule

The longstanding 4% rule serves as a starting point for many retirees. Under this strategy, retirees withdraw 4% of their savings in the first year of retirement, then adjust that amount annually for inflation.

For a $1 million nest egg, that means taking out $40,000 the first year.

“While a fixed withdrawal rate offers simplicity, it isn’t suitable for everyone as it doesn’t account for taxes, fees, or market fluctuations,” MaryAnne Gucciardi, a certified financial planner at Wealthmind Financial Planning, told Investopedia.

Three-bucket approach

This strategy divides savings into three categories:

• Cash for immediate needs (three to five years of expenses)
• Fixed-income investments for medium-term needs
• Stocks for long-term growth.

This approach helps retirees weather market volatility while maintaining growth potential.

Fixed-dollar strategy

Some retirees prefer withdrawing the same dollar amount each year. While this provides predictable income for budgeting, it doesn’t protect against inflation and could force selling more assets during market downturns.

Fixed-percentage method

This approach involves withdrawing a set percentage of the portfolio annually. The actual dollar amount varies with market performance. While simple to follow, income can fluctuate significantly from year to year.

Systematic income strategy

Under this method, retirees only withdraw investment income (dividends and interest) while preserving principal. This approach helps prevent running out of money but may not provide consistent income.

Experts stress that withdrawal strategies should consider multiple factors, including taxes, longevity and market performance.

Nathan Spohn, managing director at Spohn Partners, recommends starting with a conservative 3% withdrawal rate for early retirees younger than 65, adjusting up to 4% based on market conditions.

“A formal strategy provides structure, clarity, and peace of mind as clients navigate retirement,” Gucciardi told Investopedia, noting that retirees can combine approaches to create a personalized plan.