Early retirees may be ‘cheating themselves,’ says 4% rule creator—they can likely withdraw more money each year
Retirement researcher Bill Bengen has updated the classic 4% rule and says some retirees can safely plan to withdraw 4.7%, even in worst-case scenarios.
TL;DR
- The '4% rule' for safe retirement withdrawals, established in 1994, is being re-evaluated.
- Bill Bengen's updated research suggests a new default safe withdrawal rate of 4.7% for a 30-year retirement.
- The new research considers an updated portfolio mix of 55% stocks, 45% bonds, and 5% cash.
- The safe withdrawal rate can be influenced by inflation levels and stock market performance, especially early in retirement.
- Financial professionals recommend discussing retirement plans with an advisor and erring on the conservative side.