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Bengen conducted a number of empirical simulations of historical market behavior and concluded that a person could "draw down", withdraw, up to 4 percent annually from their portfolio without fear of outliving their money. He published his research in the
October 1994 issue of the
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Criticism of the 4% withdrawal rule include references to its assumption of one's investment portfolio, the differences in historical and current interest rates, as well as the reality that most people's spending habits are not consistently linear.
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through the 1970s. In that scenario, a 4% withdrawal rate allowed the investor's funds to last 30 years. Historically, Bengen says closer to 7% is an average safe withdrawal rate and at other times withdrawal rates up to 13% have been feasible.
65:. Bengen later stated the 4% guideline was intended as a "worst case scenario" for retirees in United States, using a hypothetical example of someone who retired in 1968 at a stock market peak before a protracted
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Following the sale of the family business, Bengen moved to
Southern California and began a Certified Financial Planner practice, Bengen Financial Services, earning his certification in 1990 and his
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rate, for "the maximum 'safe' historical withdrawal rate", and later revised it to 4.5% if tax-free and 4.1% for taxable. In low-inflation economic environments the rate may even be higher.
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in 1973. He worked for 17 years with his family-owned soft-drink-bottling franchise firm in the New York metropolitan area, during which he served tenure as president and
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Based on his early research of actual stock returns and retirement scenarios over the past 75 years, Bengen found that retirees who draw down no more than
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349:"Financial Advisor Success Podcast Ep 198: How The Creator Of The 4 Percent Rule Applied It For His Clients And His Own Retirement, With Bill Bengen"
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for withdrawal rates from retirement savings; it is eponymously known as the "Bengen rule". The rule was later further popularized by the
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The withdrawal rate has since become a staple of the financial service industry, adopted by several major financial firms.
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in 1993. He ran the firm as a fee-only (no commission) practice for twenty years, then sold the firm and retired in 2013.
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When Can I Tell My Boss, I Quit! : Seven
Lessons for Financial and Personal Rebirth in Retirement
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311:"Bill Bengen Revisits The 4% Rule Using Shiller's CAPE Ratio, Michael Kitces's Research"
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34:(1998), based on the same data and similar analysis. Bengen later called this rate the
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The Five Years Before You Retire: Retirement
Planning When You Need It the Most
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407:"Bill Bengen, Creator Of The 4% Retirement Rule, Sells Firm And Retires"
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is a retired financial adviser who first articulated the 4%
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Asset
Management: A Systematic Approach to Factor Investing
164:, stand a great chance that their money will outlive them.
330:"Choosing The Highest Safe Withdrawal Rate At Retirement"
286:
Conserving Client
Portfolios During Retirement Paperback
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Opinion: The inventor of the ‘4% rule’ just changed it
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The 4% Rule is sometimes also called the Rule of 300.
210:"Determining Withdrawal Rates Using Historical Data"
510:"15 transformational advisers: William P. Bengen"
59:Conserving Client Portfolios During Retirement
424:DSpace@MIT: Topics in advanced model rocketry
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392:. Marketwatch.com, accessed 03 November 2023
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491:"The Rule of 300: The Best Way to Retire"
547:People from San Diego County, California
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537:American finance and investment writers
267:. Charter Financial Publishing Network.
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16:American finance and investment writer
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57:. He is also the author of the book
208:Bengen, William P. (October 1994).
162:every subsequent year for inflation
242:"The Retirement Spending Solution"
240:Barrett, William P. (2011-05-04).
94:, born in 1947, Bengen received a
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562:American chief operating officers
112:Topics in Advanced Model Rocketry
557:MIT School of Engineering alumni
122:; the company was sold in 1987.
388:Brett Arends (20 October 2023)
489:Kuten, Thibault (2020-01-24).
347:Kitces, Michael (2020-10-13).
328:Bengen, William (2020-10-01).
309:Bengen, William (2020-12-17).
142:The Four Percent Drawdown rule
114:, originally published by the
1:
508:Mercado, Darla (2013-06-06).
405:Simonoff, Evan (2013-09-18).
217:Journal of Financial Planning
55:Journal of Financial Planning
259:Bengen, Bill (2012-05-01).
26:("Four percent rule") as a
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468:. Oxford UP. p. 179.
441:. iUniverse. p. 122.
362:Birken, Emily Guy (2014).
187:Turned 66 in 2013 October.
156:of their portfolio in the
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160:, and adjust that amount
86:Early life and education
219:: 14–24. Archived from
110:. He is a co-author of
435:Nelson, Colin (2006).
261:"How Much Is Enough?"
462:Ang, Andrew (2014).
552:Financial planners
542:Financial advisors
282:Bengen, William P.
136:financial planning
493:. Finance Friday.
411:Financial Advisor
20:William P. Bengen
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527:1947 births
334:FA Magazine
315:FA Magazine
265:FA Magazine
154:4.2 percent
104:aeronautics
67:bear market
521:Categories
195:References
116:MIT Press
71:inflation
69:and high
284:(2006).
92:Brooklyn
36:SAFEMAX
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246:Forbes
81:Career
224:(PDF)
213:(PDF)
175:Notes
98:from
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106:and
96:B.S.
134:in
120:COO
102:in
100:MIT
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