On this week's special episode, we'll be chatting about a recent study on retirement withdrawal rates that Christine and I authored with our colleague John Rekenthaler, who joins us for this conversation.

As listeners probably know, this is an especially challenging time for retirees trying to figure out how much they can safely withdraw in retirement given lofty stock valuations, paltry bond yields, and uncertain inflation. With that in mind, the study assessed potential retirement withdrawal rates, projecting what spending rate would be successful over an assumed 30-year retirement horizon after taking the market outlook into consideration. In this episode, I'll be asking Christine and John about the study and key takeaways, including the finding that withdrawal rates will likely have to be lower going forward than they've been in the past. For reference, you can find a link to the study in the show notes to this episode.

Morningstar Retirement Research

“What’s a Safe Retirement Spending Rate for the Decades Ahead?” by Christine Benz and John Rekenthaler, Morningstar.com, Nov. 11, 2021.

“The State of Retirement Income: Safe Withdrawal Rates,” by Christine Benz, Jeffrey Ptak, and John Rekenthaler.

Other Retirement Research Referenced

“Determining Withdrawal Rates Using Historical Data,” by William P. Bengen, Journal of Financial Planning, October 1994.

“Decision Rules and Maximum Initial Withdrawal Rates,” by Jonathan Guyton and William Klinger, Journal of Financial Planning, March 1, 2006.

“Asset Valuations and Safe Portfolio Withdrawal Rates,” by David Blanchett, Michael S. Finke, and Wade D. Pfau, July 2013.

“Exploring the Retirement Consumption Puzzle,” by David Blanchett, Journal of Financial Planning, May 2014.

“Experts Forecast Stock and Bond Returns: 2021 Edition,” by Christine Benz, Morningstar.com, Jan. 20, 2021.

“Bill Bengen: Revisiting Safe Withdrawal Rates,” The Long View podcast, Morningstar.com, Dec. 14, 2021.

“Wade Pfau: The 4% Rule Is No Longer Safe,” The Long View podcast, Morningstar.com, April 29, 2020.

“Michael Finke: Here’s What Makes Retirees Happy,” The Long View podcast, Morningstar.com, Oct. 2, 2019.

“Jonathan Guyton: What the Crisis Means for Retirement Planning,” The Long View podcast, Morningstar.com, June 17, 2020.

“David Blanchett: If You’re Retiring Now, You’re in a Pretty Rough Spot,” The Long View podcast, Morningstar.com, Sept. 18, 2019.

10-Year Breakeven Inflation Rate, Federal Reserve Bank of St. Louis

Episode 121 - November 15, 2024