Motley Fool Money The Father of the 4% Rule Says Retirees Can Withdraw Much More
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Aug 30, 2025 William Bengen, a financial planner known for creating the 4% withdrawal rule, reveals that retirees can actually withdraw more than they thought. He discusses how market conditions and inflation significantly impact safe withdrawal rates. Bengen challenges the traditional 4% guideline, suggesting a new maximum of 4.7%. He also explores optimal stock allocations for retirees and the importance of flexibility and diversification in retirement portfolios, providing innovative strategies for enjoying a richer retirement.
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Midlife Career Shift To Financial Planning
- William Bengen transitioned from running a family soda bottling business to become a financial planner in his 40s after selling the company.
- He learned planning to help himself and then offered advice to others when he couldn't find existing guidance.
4% Rule Is An Overly Narrow Heuristic
- The popular "4% rule" stems from Bengen's research but misrepresents broader findings and flexibility.
- Bengen says most retirees can safely withdraw more than the off-the-cuff 4% guideline.
Diversification Raised The SafeMax
- Bengen's SafeMax rose from 4.15% to 4.7% as he modeled more diversified portfolios.
- Including more asset classes could raise SafeMax toward 5% or higher.
