{"id":20896,"date":"2025-09-19T13:44:53","date_gmt":"2025-09-19T13:44:53","guid":{"rendered":"https:\/\/finderica.com\/?p=20896"},"modified":"2025-09-19T13:44:53","modified_gmt":"2025-09-19T13:44:53","slug":"a-richer-retirement-why-william-bengen-now-advocates-for-a-4-7-rule-not-4","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=20896","title":{"rendered":"A Richer Retirement: Why William Bengen Now Advocates for a 4.7% Rule, Not 4%"},"content":{"rendered":"
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For decades, retirees and financial planners lived by the \u201c4% rule.\u201d Withdraw 4% of your portfolio in the first year of retirement, adjust each year for inflation, and your money should last 30 years. But William Bengen \u2014 the man who invented the rule \u2014 is back with new research and a new book, A Richer Retirement<\/em>. His conclusion? Retirees may be able to start at 4.7% instead of 4%<\/strong> and still feel confident their money can last. That\u2019s a meaningful change: on a $1 million portfolio, it\u2019s the difference between $40,000 and $47,000 in your first year of retirement.<\/p>\n

Why a 4.7% Rule? What Changed?<\/h2>\n

When Bengen first created the 4% rule in the 1990s, he based it on a relatively simple portfolio: U.S. large-cap stocks and intermediate-term government bonds. He wanted a number that would hold up even in \u201cworst-case\u201d scenarios like the Great Depression or the inflation of the 1970s.<\/p>\n

Since then, markets have changed \u2014 and so has the research. Bengen now uses a more diversified portfolio that includes large, mid, small, and international stocks, plus bonds and cash. With better data and broader asset classes, his models show that a higher initial withdrawal rate is still sustainable.<\/p>\n

Bengen\u2019s New Book, A Richer Retirement<\/em> is Full of Useful Info<\/h2>\n

The early reviews on A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More<\/a><\/em> are glowing. It it William Bengen, entrepreneur, researcher, and financial planner, dives into maximizing withdrawals.<\/p>\n

Christine Benz, Director of Personal Finance and Retirement Planning at Morningstar wrote: \u201cHow much retirees can reasonably spend in retirement is the hardest problem in financial planning, and no one has studied it for as long and with as much rigor as William Bengen.\u00a0A Richer Retirement\u00a0builds upon his seminal research with the goal of helping retirees maximize their incomes and live their best lives. Chock-full of data and astute observations, it\u2019s a tremendous resource for both retirees and their financial advisors.\u201d<\/em><\/p>\n

Boldin user, Danny Dickerson agrees. He wrote on the Boldin Facebook page<\/a>: \u201cFor those that are interested in the actual data behind \u201cThe 4% Rule\u201d, I highly recommend William Bengen\u2019s recent book \u201cA Richer Retirement-Supercharging the 4% Rule\u201d<\/strong>. Bengen has updated the 4% Rule (to 4.7%). This recent book has numerous charts\/graphs that illustrate the impact of retirement timing on sustainable withdrawal rates. Once you understand the numbers behind the \u201c4% Rule\u201d, then you can more knowingly model in Boldin. One chart shows that under most scenarios<\/strong>, a 6% withdrawal would survive a 30 year retirement.<\/em>\u201c<\/p>\n

Problems with the 4.7% Rule (Or, Any Fixed Percentage Withdrawal)<\/h2>\n

While the 4.7% rule is a great starting point, it isn\u2019t the best way to plan for YOUR future. Here\u2019s why: <\/p>\n

Rules of Thumb Do Not Translate to a Reliable or Efficient Retirement Plan<\/h3>\n

At Boldin, we believe rules of thumb like the 4% (or 4.7%) rule are starting points, not prescriptions. Why? Well, it is unlikely that your spending will remain stable over your lifetime and a fixed percentage withdrawal doesn\u2019t make sense in practice. <\/p>\n

Sarah Busch, head of Boldin Advisors suggests: \u201cYour financial plan should be tailored to reflect your projected spending, which for most people changes over time. While rules of thumb, such as a static withdrawal rate, can provide a helpful anchor, it\u2019s important to use them thoughtfully.\u201d<\/em><\/p>\n

Michael Kauffman, both a coach at Boldin and a CFP\u00ae professional with Boldin Advisors agrees. He wrote, \u201cWhile the 4.7% rule can be a reasonable indicator, it isn\u2019t the preferred methodology of designing a personalized plan for funding your goals in an unknown future. This requires vastly more nuance.\u201d<\/em> <\/p>\n

The truth is, retirement isn\u2019t a single number. It\u2019s a living plan that changes with your life, your goals, and the markets.<\/p>\n

4.7% Is Not a Guarantee of Retirement Security<\/h3>\n

It\u2019s important to remember:<\/p>\n