Bogleheads® Live Bill Bengen: 4% Rule of Thumb
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Dec 26, 2022 Bill Bengen, a retired financial advisor and the mastermind behind the 4% rule for retirement withdrawals, shares his invaluable insights on sustainable financial strategies. He reassesses the 4% rule amid current market fluctuations, discussing portfolio adjustments necessary for uncertain economic times. Bengen highlights the impacts of high stock valuations and inflation on retirees and the importance of flexible strategies. Listeners will learn how age and spending patterns influence withdrawal rates, along with the potential pitfalls of fixed withdrawal approaches.
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Conservative Withdrawals in Uncertain Times
- Consider being more conservative with withdrawals, perhaps slightly less than the 4% rule.
- High inflation and potential low stock market returns warrant caution.
Optimal Stock Allocation
- The optimal stock allocation for the 4% rule has narrowed.
- Aim for 55-60% stocks to balance returns and volatility.
Withdrawal Rates for Longer Retirements
- Longer retirements require lower withdrawal rates, according to Bengen's research.
- A 4% rate from a tax-deferred account suits extended retirements (60+ years).