Investing With IBD Ep. 338 How Tailored Is Your Retirement? Revisiting The 4% Rule.
Sep 17, 2025
Bill Bengen, retirement researcher and creator of the 4% rule, shares decades of work on safe withdrawal strategies. He revisits the rule, explains why timing and early retirement risk matter, and outlines eight elements to tailor withdrawals. Topics include diversification boosts, valuation effects on safe rates, rebalancing, glide paths, and current withdrawal guidance.
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Why The 4% Research Began
- Bill Bengen created the withdrawal-rate research because clients kept asking how much they could safely withdraw in retirement.
- He couldn't find clear answers in existing literature so he conducted exhaustive historical simulations starting in 1993.
The 1968 Worst‑Case Retirement
- The original 4% (now 4.7%) came from one retiree starting in October 1968 who hit severe market losses and high inflation.
- That scenario represents the worst historical case but most retirements historically achieved much higher safe withdrawal rates.
Customize Withdrawals To Your Situation
- Customize your withdrawal rate by evaluating eight elements like withdrawal scheme, asset allocation, and planning horizon.
- Adjust for current inflation and stock-market valuations before choosing a safe rate.
