BiggerPockets Money Podcast 4% Rule Creator Bill Bengen Reveals His NEW 5% Retirement Strategy
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Jun 6, 2025 Bill Bengen, a financial advisor and the mastermind behind the 4% rule, joins the discussion with fresh insights for retirement planning. He reveals why his updated recommendation is now a 4.7% withdrawal rate, signaling greater financial flexibility for retirees. Bengen dives into the psychological barriers retirees face when spending, the role of real estate in a diversified portfolio, and strategies for both active and passive management. He emphasizes the importance of controlling expenses and finding purpose beyond money, reshaping traditional retirement strategies.
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4% Rule Is A Conservative Baseline
- The original 4% rule was designed as a conservative worst-case scenario using two asset classes.
- Most retirees historically could withdraw safely at rates higher than 4%, now updated to about 4.7%.
Diversification Raises Withdrawal Rate
- Adding diversification beyond U.S. stocks and bonds modestly increases safe withdrawal rates.
- The benefit of more asset classes is nearing a natural limit, with only a small increase to 4.7%.
Shift Portfolio Near Retirement
- Be heavier in stocks during accumulation to grow wealth quickly.
- Shift to a conservative 60/40 or 55/45 stock/bond portfolio about five years before retirement.
