Episode 197: RWS Live! With Bill Bengen: Part 2

In this conversation, Wade Pfau, Alex Murguia and Bill Bengen discuss various aspects of retirement planning, focusing on risk management, asset allocation, and the implications of market conditions on withdrawal rates. Bengen shares insights on adjusting the traditional 4% rule based on current market valuations and inflation, emphasizing the importance of a diversified portfolio and the role of annuities. The discussion also covers the significance of sequence of returns risk and the potential benefits of rising equity glide paths in retirement strategies.

 

Takeaways

• A 65% stock allocation is recommended for retirees.
• Risk management involves adjusting asset allocations based on market conditions.
• The first 10 years of retirement are crucial for long-term success.
• Diversification is key to mitigating risks in retirement portfolios.
• Annuities can play a beneficial role in retirement income planning.
• Market valuations should influence withdrawal rate strategies.
• Rising equity glide paths may help manage sequence of returns risk.
• Monte Carlo simulations can provide insights but have limitations.
• The 4% rule may need adjustments based on current economic conditions.
• Retirement planning should consider both historical data and future projections.

 

Chapters

00:00 Replacing Micro Caps in Portfolios 00:25 Risk Management and Asset Allocation 01:32 The Role of Third-Party Advice in Portfolio Management 02:50 Navigating Market Swings and Timing Investments 03:41 Inflation and Asset Allocation Strategies 05:27 International vs. Domestic Equity Allocation 07:04 Historical vs. Projected Data in Retirement Planning 12:18 Understanding Sequence of Returns Risk 14:18 Adjusting Withdrawal Rates Based on Market Conditions 15:45 Exploring Rising Equity Glide Paths 23:29 Finding the Right Equity Allocation for Retirement 27:29 Adjusting Withdrawal Rates for Inflation and Market Valuations   Links   

Get Bill Bengen’s New Book – A Richer Retirement
Want to dive deeper into the research behind the 4% rule and how retirement income planning has evolved?
Bill Bengen’s new book, A Richer Retirement, is now available—visit bengenfs.com to learn more and get your copy.

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This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”