In this episode of Retire with Style, Wade Pfau and Alex Murguia talk with William Bengen, pioneer of the 4% rule in retirement planning. They explore the rule’s evolution, how inflation and market valuations shape sustainable withdrawals, and Bengen’s current recommendations. The discussion highlights the role of asset allocation, the importance of withdrawal strategies, and why ongoing monitoring is essential for a secure retirement.
Takeaways
- William Bengen modernized retirement income planning with the 4% rule.
- Inflation is a critical factor in determining sustainable withdrawal rates.
- Market volatility can significantly impact retirement portfolios.
- A comprehensive withdrawal plan should consider multiple factors.
- Current recommendations suggest a withdrawal rate of around 5.5%.
- Asset allocation plays a vital role in retirement planning.
- Investors should consider a rising equity glide path strategy.
- Regular monitoring and adjustments to retirement plans are essential.
- High inflation can permanently elevate withdrawal amounts.
- The 4% rule is not a one-size-fits-all solution.
Chapters
00:00 Introduction to Retirement Income Planning
01:14 The Birth of the 4% Rule
03:03 Understanding Withdrawal Rates
09:15 The Impact of Inflation on Withdrawals
12:45 Market Valuation and Its Effects
18:07 Current Withdrawal Rate Recommendations
21:10 Asset Allocation Strategies
24:04 Free Lunches in Investment Strategies
27:34 Key Takeaways from A Richer Retirement
31:15 Future Research Directions
Links
Join Us for RWS Live! with Bill Bengen!
We’re going live on Thursday, September 11th at 1:00 PM ET on the Retire With Style YouTube channel! You’ll have the chance to ask Bill Bengen—creator of the 4% rule—your retirement questions live in the chat.
Search “Retire With Style” on YouTube, or click this link to join us directly: https://retirewithstyle.com/rws-youtube-live
Don’t forget to subscribe so you get notified when we go live!
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This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”
