This article was first posted July 1, 2014.
A Retire Early reader sent me this CNN Money Magazine article touting Wade Pfau's "research" a while back. Dr. Pfau, is a "professor of retirement income" at something called the American College for Financial Services. The American College provides "professional training to all types of financial practitioners". Presumably they have an interest in maintaining a high level of fee & commission income to the profession.
Here's a link to Pfau's "research" report.
Well, duh. I agree that you can only withdraw 3.00% if you're letting a financial advisor and the mutual fund managers he or she recommends skim 1.00%, but why would you do that? You can put together a diversified portfolio at a low-fee provider like Vanguard for 0.10% in fees or less and take the 4% SWR you're entitled to.
Resources for more information
Vanguard's fees are costing me a new car? (2013) You'll have to save a lot more for retirement if a financial advisor and the mutual fund managers he recommends are taking a lot of your wealth in excessive fees.
The Federal Thrift Savings Plan: A Model for the Private Sector? (2008) Lobbying arm of the mutual fund industry complains that it's not fair to compare their products to the low costs of the TSP.
ExxonMobil Savings Plan Brochure (PDF) -- Fund expense ratios and 401k mgmt fee on page 17 of document. Annual fees ranges from 2 basis points for the bond fund to 6 basis points for the international equity fund.
USA Today -- Are fees draining your 401(k) retirement savings? (Aug 25, 2009) Article notes that some small company 401(k) plans can have annual fees & expenses as high as 4.8% of assets.