For decades, retirees and financial planners lived by the “4% rule.” Withdraw 4% of your portfolio in the first year of retirement, adjust each year for inflation, and your money should last 30 years. But William Bengen — the man who invented the rule — is back with new research and a new book, A Richer Retirement. His conclusion? Retirees may be able to start at 4.7% instead of 4% and still feel confident their money can last. That’s a meaningful change: on a $1 million portfolio, it’s the difference between $40,000 and $47,000 in your first year of retirement.
Why a 4.7% Rule? What Changed?
When Bengen first created the 4% rule in the 1990s, he based it on a relatively simple portfolio: U.S. large-cap stocks and intermediate-term government bonds. He wanted a number that would hold up even in “worst-case” scenarios like the Great Depression or the inflation of the 1970s.
Since then, markets have changed — and so has the research. Bengen now uses a more diversified portfolio that includes large, mid, small, and international stocks, plus bonds and cash. With better data and broader asset classes, his models show that a higher initial withdrawal rate is still sustainable.
Bengen’s New Book, A Richer Retirement is Full of Useful Info
The early reviews on A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More are glowing. It it William Bengen, entrepreneur, researcher, and financial planner, dives into maximizing withdrawals.
Christine Benz, Director of Personal Finance and Retirement Planning at Morningstar wrote: “How much retirees can reasonably spend in retirement is the hardest problem in financial planning, and no one has studied it for as long and with as much rigor as William Bengen. A Richer Retirement builds upon his seminal research with the goal of helping retirees maximize their incomes and live their best lives. Chock-full of data and astute observations, it’s a tremendous resource for both retirees and their financial advisors.”
Boldin user, Danny Dickerson agrees. He wrote on the Boldin Facebook page: “For those that are interested in the actual data behind “The 4% Rule”, I highly recommend William Bengen’s recent book “A Richer Retirement-Supercharging the 4% Rule”. Bengen has updated the 4% Rule (to 4.7%). This recent book has numerous charts/graphs that illustrate the impact of retirement timing on sustainable withdrawal rates. Once you understand the numbers behind the “4% Rule”, then you can more knowingly model in Boldin. One chart shows that under most scenarios, a 6% withdrawal would survive a 30 year retirement.“
Problems with the 4.7% Rule (Or, Any Fixed Percentage Withdrawal)
While the 4.7% rule is a great starting point, it isn’t the best way to plan for YOUR future. Here’s why:
Rules of Thumb Do Not Translate to a Reliable or Efficient Retirement Plan
At Boldin, we believe rules of thumb like the 4% (or 4.7%) rule are starting points, not prescriptions. Why? Well, it is unlikely that your spending will remain stable over your lifetime and a fixed percentage withdrawal doesn’t make sense in practice.
Sarah Busch, head of Boldin Advisors suggests: “Your financial plan should be tailored to reflect your projected spending, which for most people changes over time. While rules of thumb, such as a static withdrawal rate, can provide a helpful anchor, it’s important to use them thoughtfully.”
Michael Kauffman, both a coach at Boldin and a CFP® professional with Boldin Advisors agrees. He wrote, “While the 4.7% rule can be a reasonable indicator, it isn’t the preferred methodology of designing a personalized plan for funding your goals in an unknown future. This requires vastly more nuance.”
The truth is, retirement isn’t a single number. It’s a living plan that changes with your life, your goals, and the markets.
4.7% Is Not a Guarantee of Retirement Security
It’s important to remember:
- 4.7% isn’t a free pass. It’s still designed as a conservative baseline. You’re not guaranteed success if your portfolio isn’t diversified or if you spend rigidly.
- Flexibility matters. Retirees who can cut back a little in tough market years often do much better than those who insist on the same inflation-adjusted amount every year.
- Context matters. Inflation, interest rates, and market valuations at the time you retire can all affect how much is safe to spend.
How Boldin Helps You Strategize Your Retirement Income
The Boldin Planner lets you go beyond rules of thumb.
Plan for Evolving Income and Spending
How much you earn in retirement is likely to change. You might have a part-time job or delay the start of Social Security for a few years after you stop working. And, your spending is almost certainly going to evolve over the 30+ years you are retired. These changes in your income and spending will have a profound impact on your withdrawal needs.
And, Boldin enables you to plan for your evolving expenses and income.
Try Different Withdrawal Strategies
With the Boldin Planner your withdrawals are based on your projected spending. Planning retirement around spending needs ensures your strategy reflects the life you actually want to live, not just an arbitrary savings target.
You can opt to plan your spending with any of the following withdrawal strategies:
- Based on Spending Needs Alone: With this default selection, the Planner will only withdraw enough to satisfy Required Minimum Distributions and fund any shortfall between the expenses you’ve entered in your plan and new income coming in from sources such as work, pensions and Social Security. Withdrawals will be taken based upon your withdrawal order and prioritized account(s).
- A Fixed Percentage Withdrawal: Boldin’s Fixed Percentage strategy allows you to set your desired withdrawal rate and start age. The plan takes the portfolio balance in the start year and draws down your desired percent, increased through your lifespan at your general inflation rate. (IE: it does not assess the portfolio balance every year.) Our model includes user entered expenses in withdrawals under this selection, and provides a green plot line to help you compare the fixed percentage to your budgeted expenses. Withdrawals will be taken based upon your withdrawal order and prioritized account(s).
- Maximum Spending: The Maximum Spending Strategy will deplete all of your accounts down to your legacy goal (or zero if you don’t have one) by your longevity age to provide a measure of how much you can spend on an annual basis. This is a great place to go for insights about your ability to increase lifestyle spending on wants and wishes and may be considered an upper spending guardrail. Withdrawals will be taken based upon your withdrawal order and prioritized account(s).
Gain Various Insights, Including Your Lifetime Average Retirement Withdrawal Rate
Once your plan is set up, you can see your average retirement withdrawal rate and how that withdrawal rate changes overtime. Check out:
Run What Ifs
- Test withdrawal strategies at 4%, 4.7%, or any rate you choose.
- See how your plan holds up under thousands of market “what-ifs.”
- Model flexible spending strategies so you know how much room you have to adjust.
- Compare how different choices — retiring early, downsizing, delaying Social Security — affect your chance of success.
- Am I diversified enough to support higher withdrawals?
- What does my personal “safe withdrawal rate” look like in different scenarios?
- How much flexibility do I want to build into my plan?
- If I retire earlier — or live longer — how should I adjust?
Final Word
Bengen’s new research is good news: retirees may be able to spend a little more with confidence. But it’s not about chasing a single number. It’s about understanding your resources, your goals, and your flexibility.
At Boldin, that’s what we call financial confidence: a plan that adapts with you, so you can enjoy the retirement you want without second-guessing every dollar.
Ready to see how your plan looks with the 4.7% rule? Better yet? What it looks like with a personalized retirement income plan? Log in to Boldin and run the numbers today.