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- Herausgeber: John Wiley & Sons
- Kategorie: Ratgeber
- Sprache: Englisch
NATIONAL BESTSELLER
Know exactly how much you can safely spend each year after you retire without outliving your nest egg
In A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More, entrepreneur, researcher, and financial planner, William P. Bengen, delivers a straightforward, soup-to-nuts guide for maximizing your withdrawals from your investment accounts during your retirement. The author explains how you can draw heavily on your retirement accounts without spending yourself into premature poverty.
This book is a comprehensive roadmap to constructing your personal retirement withdrawal plan. You'll learn how to compute a low-risk maximum withdrawal rate so that you can enjoy your retirement savings to the utmost. You'll also discover guidance on why and how to adjust your withdrawals during retirement to help make sure that your accounts last your entire life.
You'll also find:
- The eight elements of a comprehensive personal retirement withdrawal plan
- Techniques for selecting your withdrawal rate based on the eight elements, inflation, and stock market valuation
- A template for your withdrawal plan that will help you recognize if you're overspending (or underspending!) and exactly how to address that issue
Perfect for well-informed laypeople entering, nearing, or in retirement, A Richer Retirement is a can't-miss retirement playbook for everyone who wants to make the most of their retirement savings without outliving their nest egg. It's also an essential read for financial professionals who serve clients in or close to retirement.
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Veröffentlichungsjahr: 2025
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Table of Contents
Cover
Table of Contents
PRAISE FOR
A RICHER RETIREMENT
TITLE PAGE
COPYRIGHT
DEDICATION
INTRODUCTION
ACKNOWLEDGMENTS
CHAPTER 1: THE PROBLEM: OUTLIVING YOUR RETIREMENT SAVINGS
1.1 PORTFOLIO LONGEVITY, BEAR MARKETS, AND INFLATION
1.2 MY RESEARCH METHODOLOGY
1.3 GENESIS OF THE “4% RULE”
1.4 RECENT RESEARCH
1.5 THE “BALLOON” ANALOGY
CHAPTER 2: THE SOLUTION: INTRODUCING “SAFEMAX”
2.1 THE “UNIVERSAL SAFEMAX”
2.2 A BRIEF HISTORY OF THE UNIVERSAL SAFEMAX
2.3 OVER‐USE OF THE UNIVERSAL SAFEMAX
2.4 “FEELING LUCKY” METHOD FOR SELECTING A PERSONAL SAFEMAX
2.5 SAFEMAX AND STOCK VALUATIONS: THE “KITCES CHART”
2.6 INFLATION AND SAFEMAX
2.7 HOW WELL DOES OUR SAFEMAX “FITTED CURVE” AGREE WITH HISTORY?
CHAPTER 3: THE EIGHT ELEMENTS OF A PERSONAL RETIREMENT WITHDRAWAL PLAN
3.1 ELEMENT #1: WITHDRAWAL SCHEME
3.2 ELEMENT #2: PLANNING HORIZON
3.3 ELEMENT #3: TAXABLE VS. NON‐TAXABLE PORTFOLIOS
3.4 ELEMENT #4: LEAVING A LEGACY TO HEIRS
3.5 ELEMENT #5: ASSET ALLOCATION
3.6 ELEMENT #6: PORTFOLIO REBALANCING FREQUENCY
3.7 ELEMENT #7: THE SUPERINVESTOR: STRIVING FOR ABOVE‐MARKET RETURNS
3.8 ELEMENT #8: WITHDRAWAL TIMING
3.9 THE “STANDARD CONFIGURATION” FOR THE “4.7% RULE”
CHAPTER 4: ELEMENT #1: WITHDRAWAL SCHEMES
4.1 “COLA” WITHDRAWAL SCHEME
4.2 “FIXED ANNUITY” WITHDRAWAL SCHEME
4.3 “FIXED PERCENTAGE” WITHDRAWAL SCHEME
4.4 “FRONT‐LOADED” WITHDRAWAL SCHEME
4.5 PERFORMANCE‐BASED WITHDRAWAL SCHEMES
4.6 DAVID BLANCHETT'S RETIREMENT “SMILE”
CHAPTER 5: ELEMENT #2: PLANNING HORIZON
5.1 LIFE EXPECTANCY AND PLANNING HORIZON
5.2 UNIVERSAL SAFEMAX VS. PLANNING HORIZON (STANDARD CONFIGURATION)
5.3 SAFEMAX VS. PLANNING HORIZON (OTHER SAMPLE RETIREES)
5.4 CONCLUSION
CHAPTER 6: ELEMENT #3: TAXABLE VS. NON‐TAXABLE PORTFOLIOS
6.1 MY INITIAL DILEMMA
6.2 INVESTMENT CHARACTERISTICS
6.3 SAFEMAX AND PORTFOLIO TAX RATES
6.4 WHICH PTR DO I USE FOR MY PORTFOLIO?
CHAPTER 7: ELEMENT #4: LEAVING A LEGACY TO YOUR HEIRS
7.1 SAFEMAX VS. LEGACY FOR THE STANDARD CONFIGURATION
7.2 SAFEMAX VS. REAL AND NOMINAL LEGACY
7.3 SAFEMAX VS. LEGACY FOR OTHER SAMPLE RETIREES
7.4 CONCLUSION
CHAPTER 8: ELEMENT #5: ASSET ALLOCATION
8.1 THE SIGNIFICANCE OF ASSET ALLOCATION
8.2 SAFEMAX VS. ASSET ALLOCATION: A HISTORICAL PERSPECTIVE
8.3 WHICH ASSET ALLOCATION IS RIGHT FOR ME?
8.4 TREASURY BILLS VS. US GOVERNMENT BONDS: WHAT'S THE OPTIMUM MIX?
8.5 HOW DO I ALLOCATE AMONG MULTIPLE STOCK ASSET CLASSES?
8.6 EVEN MORE ASSET CLASSES?
8.7 EXOTICA: ALICE IN ASSETLAND
8.8 OPTIMUM ASSET ALLOCATION VS. PLANNING HORIZON
8.9 VARYING EQUITY ALLOCATION DURING RETIREMENT: IS IT EFFECTIVE?
CHAPTER 9: ELEMENT #6: PORTFOLIO REBALANCING
9.1 SAFEMAX VS. PORTFOLIO REBALANCING INTERVAL
9.2 PORTFOLIO REBALANCING VS. GLIDEPATH INVESTING
9.3 REBALANCING AND PORTFOLIO RETURNS
CHAPTER 10: ELEMENT #7: THE “SUPERINVESTOR” – STRIVING FOR ABOVE‐MARKET RETURNS
CHAPTER 11: ELEMENT #8: TIMING OF WITHDRAWALS
CHAPTER 12: CREATING AND MANAGING A PERSONAL RETIREMENT WITHDRAWAL PLAN (FIVE CASE STUDIES)
12.1 WITHDRAWAL PLAN #1
12.2 THE CURRENT WITHDRAWAL RATE, A POWERFUL TOOL
12.3 THE SYNTHETIC CWR TEMPLATE
12.4 SYNTHETIC CWR TEMPLATE FOR RETIREE #1
12.5 MANAGING A PERSONAL WITHDRAWAL PLAN
12.6 MANAGING WITHDRAWAL PLAN #1 (EARLY BEAR MARKET)
12.7 WITHDRAWAL PLAN #2
12.8 MANAGING WITHDRAWAL PLAN #2: UNEXPECTED HIGH INFLATION
12.9 WITHDRAWAL PLAN #3
12.10 MANAGING WITHDRAWAL PLAN #3 (FRONT‐LOADED WITHDRAWAL SCHEME)
12.11 WITHDRAWAL PLAN #4
12.12 MANAGING WITHDRAWAL PLAN #4 (SAVING THE BEST FOR LATER)
12.13 WITHDRAWAL PLAN #5
12.14 MANAGING WITHDRAWAL PLAN #5 (CHANGING HORSES MID‐STREAM)
CHAPTER 13: TOPICS OF SPECIAL INTEREST
13.1 HAS THE 4.7% RULE ALREADY FAILED?
13.2 REQUIRED MINIMUM IRA DISTRIBUTIONS AND SAFEMAX
13.3 SHOULD I “BUY‐AND‐HOLD”?
13.4 ANNUITIES
13.5 WHEN THE SHILLER CAPE IS “OFF THE CHARTS”
13.6 IS IT SCIENCE?
13.7 SHOULD I WAIT FOR A HIGHER SAFEMAX TO RETIRE?
CHAPTER 14: GO FORTH AND PLAN!
APPENDIX A: APPENDIX ABOOKS WORTH READING
APPENDIX B: APPENDIX BARTICLES WORTH READING
PORTFOLIO WITHDRAWAL STRATEGIES
APPENDIX C: APPENDIX CSOFTWARE WORTH USING
ABOUT THE AUTHOR
INDEX
END USER LICENSE AGREEMENT
List of Tables
Chapter 1
Table 1.1 Characteristics of major bear markets in US large‐company stocks...
Chapter 2
Table 2.1 SAFEMAX vs. SHILLER CAPE for selected retirees. (Tax‐advantaged a...
Table 2.2 SAFEMAX finder (standard configuration) low inflation regime (CPI...
Table 2.3 SAFEMAX finder (standard configuration) moderate inflation regime...
Table 2.4 SAFEMAX finder (Standard configuration) high‐inflation regime (CP...
Chapter 3
Table 3.1 “Standard configuration” of the eight Elements
Chapter 4
Table 4.1 SAFEMAX finder (fixed annuity withdrawal scheme). Tax‐advantaged...
Table 4.2 Large 12‐month portfolio declines since 1 January 1926 (standard...
Chapter 5
Table 5.1 SAFEMAX for very long planning horizons (three retirees). Standar...
Chapter 7
Table 7.1 Comparison of 30‐year statistics for three retirees. Standard con...
Chapter 8
Table 8.1 Rates of Return for Fixed Income Asset Classes 1926–2022
Table 8.2 Rates of return for stock asset classes 1926–2022
Table 8.3 Average unconstrained asset allocation
Table 8.4 Suggested change to asset allocation
Chapter 9
Table 9.1 Expected portfolio rate of return computation
Chapter 12
Table 12.1 Elements for Retiree #1
Table 12.2 SAFEMAX for retiree #1
Table 12.3 Elements for retiree #2
Table 12.4 SAFEMAX for retiree #2
Table 12.5 Elements for retiree #3
Table 12.6 SAFEMAX for retiree #3
Table 12.7 SAFEMAX finder for retiree #3. 45% equities (9% each)/50% bonds/...
Table 12.8 Elements for retiree #4
Table 12.9 SAFEMAX for retiree #4
Table 12.10 Elements for retiree #5
Table 12.11 WR for retiree #5
Table 12.12 Elements for retiree #5 (new plan)
Table 12.13 SAFEMAX for retiree #5 (new plan)
List of Illustrations
Chapter 1
Figure 1.1 Number of years portfolio lasted @ 6% initial withdrawal rate. Ta...
Figure 1.2 Data grid for 1 July 1961 retiree
Chapter 2
Figure 2.1 Number of years portfolio lasted @ 4.7% Initial Withdrawal Rate....
Figure 2.2 A Brief History of Universal SAFEMAX. Tax‐advantaged account, 30 ...
Figure 2.3 Individual SAFEMAX (1 January 1926–1 January 2013). Tax‐advantage...
Figure 2.4 Nominal value of portfolio after 30 years (4.7% IWR). Tax‐advanta...
Figure 2.5 “Success” rate for various initial withdrawal rates. Tax‐advantag...
Figure 2.6 INDIVIDUAL SAFEMAX VS. SHILLER CAPE (1/1/1926–1/1/2013). Tax‐adva...
Figure 2.7 Individual SAFEMAX vs. SHILLER CAPE (sorted within inflation regi...
Figure 2.8 INDIVIDUAL SAFEMAX VS. SHILLER CAPE (LOW INFLATION REGIME)(THRU 1...
Figure 2.9 INDIVIDUAL SAFEMAX VS. SHILLER CAPE (MODERATE INFLATION REGIME)(T...
Figure 2.10 INDIVIDUAL SAFEMAX VS. SHILLER CAPE (HIGH INFLATION REGIME)(THRU...
Figure 2.11 ACTUAL VS. “CURVE‐FITTED” INDIVIDUAL SAFEMAX. Tax‐advantaged acc...
Chapter 4
Figure 4.1 Individual SAFEMAX for “Fixed Annuity” and “COLA” withdrawal sche...
Figure 4.2 INDIVIDUAL FA SAFEMAX VS. SHILLER CAPE. Tax‐advantaged account, 3...
Figure 4.3 Cumulative withdrawals under COLA and FA systems (three retirees)...
Figure 4.4 12‐month withdrawals for “FP” and “COLA” schemes (1 October 1968...
Figure 4.5 Annual withdrawals for “FP” and “COLA” schemes (1 January 1975 re...
Figure 4.6 12‐month withdrawals for “FP” and “COLA” schemes (1 July 1989 ret...
Figure 4.7 30‐year cumulative withdrawals for “FP” and “COLA” schemes (all r...
Figure 4.8 Cumulative 30‐year withdrawals vs. IWR (FP scheme) (10 retirees)....
Figure 4.9 Annual withdrawals for FP and COLA schemes (1 January 1975 retire...
Figure 4.10 Annual withdrawals for FP and COLA schemes (1 October 1968 retir...
Figure 4.11 “Cliff %” required for given IWR, front‐loaded scheme (three ret...
Figure 4.12 Real withdrawals for “floor and ceiling” scheme (1 April 1926 re...
Figure 4.13 Real withdrawals for three withdrawal schemes (4/1/1926 retiree)...
Figure 4.14 Real withdrawals for three withdrawal schemes (January 1 1983 re...
Figure 4.15 Real withdrawals for David Blanchett's “retirement smile” (conce...
Chapter 5
Figure 5.1 SAFEMAX vs. planning horizon (10/1/1968 retiree) (low SAFEMAX). T...
Figure 5.2 SAFEMAX vs. planning horizon (1 July 1989 retiree) (average SAFEM...
Figure 5.3 SAFEMAX vs. planning horizon (1 January 1975 retiree) (high SAFEM...
Chapter 6
Figure 6.1 SAFEMAX vs. overall tax rate (10/1/1968 retiree). Standard config...
Figure 6.2 SAFEMAX vs. overall tax rate (1 January 1975 retiree). Standard c...
Figure 6.3 SAFEMAX vs. overall tax rate (1 July 1989 retiree). Standard conf...
Chapter 7
Figure 7.1 SAFEMAX vs. legacy (1 October 1968 retiree) ($100,000 begin value...
Figure 7.2 SAFEMAX vs. real legacy (1 October 1968 retiree) ($100,000 begin...
Figure 7.3 SAFEMAX vs. legacy (1 January 1975 retiree) ($100,000 begin value...
Figure 7.4 SAFEMAX vs. legacy (1 July 1989 retiree) ($100,000 begin value)....
Chapter 8
Figure 8.1 Universal SAFEMAX vs. equity allocation (two asset classes) 30‐ye...
Figure 8.2A Universal SAFEMAX vs. equity allocation (seven asset classes)....
Figure 8.2B “Summit” Universal SAFEMAX vs. equity allocation (seven asset c...
Figure 8.3 Nominal value of portfolio after 20 years vs. stock allocation. (...
Figure 8.4 SAFEMAX vs. fixed income allocation (1 July 1989 retiree). Tax‐ad...
Figure 8.5 10‐year annualized returns for six asset classes (1 January 1926–...
Figure 8.6A Optimal asset allocation for individual SAFEMAX 1 January 1926–...
Figure 8.6B Optimal asset allocation for individual SAFEMAX 1 January 1960–...
Figure 8.7A Individual SAFEMAX for “equal‐weighted stocks” and “unconstrain...
Figure 8.7B Individual SAFEMAX for “equal‐weighted stocks” and “test” alloc...
Figure 8.8 Optimum stock allocation vs. planning horizon (1 October 1968 ret...
Figure 8.9 Optimum stock allocation vs. retirement time horizon (1 July 1989...
Figure 8.10 Optimum stock allocation vs. retirement time horizon (1 January...
Figure 8.11 Individual SAFEMAX for “glidepath” allocations – three retirees....
Figure 8.12 SAFEMAX for “fixed” and “1% rising glidepath” allocations (1 Jan...
Figure 8.13 Percentage difference in SAFEMAX for “fixed” and “1% increasing...
Chapter 9
Figure 9.1 SAFEMAX vs. rebalancing interval (20‐retiree average). Tax‐advant...
Figure 9.2 SAFEMAX vs. rebalancing interval (1 July 1927 retiree). Tax‐advan...
Figure 9.3 SAFEMAX vs. rebalancing interval (1 July 1941 retiree). Tax‐advan...
Figure 9.4 Cumulative portfolio rates of return 1 January 1926 retiree (4‐qu...
Figure 9.5 SAFEMAX vs. 30‐year portfolio rate of return (259 retirees 1 Janu...
Chapter 10
Figure 10.1 SAFEMAX vs. equity incremental investment returns (1 July 1989 r...
Figure 10.2 SAFEMAX vs. equity incremental investment returns (1 October 196...
Figure 10.3 SAFEMAX vs. equity incremental investment returns (1 January 197...
Chapter 12
Figure 12.1 Annual CWR for 1 July 1989 retiree. Standard configuration, seve...
Figure 12.2 Synthetic CWR template for retiree #1, 7.24% SAFEMAX. Standard c...
Figure 12.3 Retiree #1‐ hypothetical portfolio returns and CPI. Standard con...
Figure 12.4 Current withdrawal rates for retiree #1, actual vs. template. St...
Figure 12.5 Current withdrawal rates for retiree #1, actual vs. template. St...
Figure 12.6 Synthetic CWR template for retiree #2, 5.54% SAFEMAX. Standard c...
Figure 12.7 Retiree #2‐ hypothetical portfolio returns and CPI. Standard con...
Figure 12.8 Current withdrawal rates for retiree #2, actual vs. template. St...
Figure 12.9 Current withdrawal rates for retiree #2, actual vs. template. St...
Figure 12.10 Current withdrawal rates for retiree #2, actual vs. template. S...
Figure 12.11 Current withdrawal rates for retiree #2, actual vs. template. S...
Figure 12.12 Current withdrawal rates for retiree #2, actual vs. template. S...
Figure 12.13 Comparison of withdrawals for “late” and “early” adjustments fo...
Figure 12.14 CWR comparison for template and optimized retiree #2. Standard...
Figure 12.15 SAFEMAX vs. Shiller CAPE (COLA standard configuration vs. retir...
Figure 12.16 SAFEMAX vs. Shiller CAPE (retiree #3 using COLA). Taxable accou...
Figure 12.17 Synthetic CWR template for retiree #3. 4.70% IWR, FL scheme, 40...
Figure 12.18 “Cliff %” required for given IWR, “front‐loaded” scheme (three...
Figure 12.19 Retiree #3 – portfolio returns and CPI (based on 1 October 1959...
Figure 12.20 Current withdrawal rates for retiree #3, actual vs. template. F...
Figure 12.21 Year‐end portfolio value for retiree #3, actual vs. template. F...
Figure 12.22 Synthetic CWR template for retiree #4. 7.26% IWR, standard conf...
Figure 12.23 Retiree #4‐ portfolio returns and CPI (based on 1 October 1990...
Figure 12.24 Current withdrawal rates for retiree #4, actual vs. template FP...
Figure 12.25 Current withdrawal rates for retiree #4, adjusted vs. template....
Figure 12.26 Current withdrawal rates for retiree #4, adjusted #2 vs. templa...
Figure 12.27 Synthetic portfolio value template for retiree #5, 6.0% IWR. FP...
Figure 12.28 Retiree #5‐ portfolio returns (based on 1/1/1949 retiree). Seve...
Figure 12.29 Portfolio value for retiree #5, actual vs. template. FP scheme,...
Figure 12.30 Synthetic CWR template for retiree #5, 7.18% SAFEMAX, new plan....
Figure 12.31 Retiree #5 (new plan)‐ portfolio returns and CPI (based on 1 Ja...
Figure 12.32 Current withdrawal rates for retiree #5, new plan, actual vs. t...
Chapter 13
Figure 13.1 CWR for 1 July 2000 and 31 October 1968 retirees (at 4.7% IWR)....
Figure 13.2 Current withdrawal rate for 1 October 2007 and 31 October 1968 r...
Figure 13.3 Current withdrawal rates for 1 July 1989 retiree (using 7.1% SAF...
Figure 13.4 50‐year current withdrawal rate for 1 July 1989 retiree (using 4...
Figure 13.5 Annual withdrawals for retiree A (1 October 1931) vs. retiree B...
Figure 13.6 Annual withdrawals for retiree C (1 October 1989) vs. retiree D...
Guide
COVER
TABLE OF CONTENTS
PRAISE FOR A RICHER RETIREMENT
TITLE PAGE
COPYRIGHT
DEDICATION
INTRODUCTION
ACKNOWLEDGMENTS
BEGIN READING
APPENDIX A BOOKS WORTH READING
APPENDIX B ARTICLES WORTH READING
APPENDIX C SOFTWARE WORTH USING
ABOUT THE AUTHOR
INDEX
END USER LICENSE AGREEMENT
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PRAISE FOR A RICHER RETIREMENT
“Bill Bengen has delivered a tour de force of retirement planning. Although written for retail clients, financial advisors and other professionals will benefit from his analysis of the most difficult problem facing retirement planners: how to make one's “nest egg” last a lifetime. Bengen has quantified the elements and risks underlying how much retirees can spend over a 30‐year (or sometimes longer) retirement horizon.”
—Robert Huebscher, Founder of Advisor Perspectives and, former Vice Chairman, VettaFi and the Toronto Stock Exchange
“A Richer Retirement is the most complete, detailed, and readable exposition of retirement spending I have seen. If Bill's marvelous book doesn't cover it, it's not worth worrying about!”
— William J. Bernstein, bestselling author of The Investor’s Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between
“No other researcher has explored so deeply how to navigate the complexities of safely taking income out of a retirement portfolio or explained it so clearly that even a novice investor can understand the how and why.”
—Bob Veres, Owner, Inside Information
“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. Chockfull of data and astute observations, it's a tremendous resource for both retirees and their financial advisors.”
—Christine Benz, Director of Personal Finance and Retirement Planning, Morningstar
“Bill Bengen introduced the field of retirement income planning to financial professionals and academics. This book provides a deeper dive into the factors that influence how much a retiree can safely withdraw from investments to create a lifestyle. How should a retiree deal with investment risk, inflation, the high price of stocks, and longer lifespans? In a style that is both comprehensive and a delight to read, Bill demystifies investing and spending for today's retiree.”
—Michael Finke, Professor and Expert in Retirement Investing, Income Planning, and Life Satisfaction
“For the past thirty years, William Bengen's sustainable spending research has served as the heart and soul of the “Total Return” retirement income style. A Richer Retirement documents what all he has learned and pushes the analysis forward with new techniques for maximizing the spending power of your retirement investments.”
—Wade Pfau, Ph.D., CFA, RICP, Author of Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success
“Bengen delivers a well‐researched, rigorous, and readable book that clearly presents the methodology and assumptions required to develop a safe withdrawal rate while providing valuable insights into the risks of withdrawal strategies in retirement. Importantly he shows how to manage the strategy throughout retirement.”
—Larry Swedroe, Author of 18 books on investing, including Enrich Your Future
“Bill Bengen is one of the preeminent thinkers when it comes to retirement income planning. To call his early research on safe initial withdrawals (SAFEMAX in his speak) and the “4% rule” (or more technically the “4.15% rule”) groundbreaking, would be an understatement. In this book, he provides insights into the underlying assumptions of his past studies and how they can affect recommendations (e.g., 4.0% to 4.5% to 4.7%, etc), using a very conversational approach. The book is rich in content and worth a read for anyone interested in learning about how to determine what the “right” spending rate in retirement should be!”
—David Blanchett, Portfolio Manager and Head of Retirement Research, PGIM DC Solutions
“As the inventor of the 4% rule, there is no one better than Bill Bengen to walk through what has changed with new research, and what has remained the same, when it comes to determining a sustainable withdrawal rate in retirement! A must‐read for anyone who wants to understand where the 4% rule came from, and how to apply it in today's environment!”
—Michael Kitces, Chief Financial Planning Nerd, Kitces.com
“Bill Bengen gave us the first word on Safe Withdrawal Rates. Now he offers a feast, a full exploration of how (and why) we can often take more than his original 4.7 percent.”
—Scott Burns, Columnist and Creator, Couch Potato Investing
“Decades after he first developed the 4%‐rule that explains how much retirees can safely spend each year without running out of money, William Bengen is back with updated advice. His deep dive into the research behind the not‐so‐simple rule‐of‐thumb shows do‐it‐yourself investors how they can safely spend even more in retirement based on their individual circumstances.”
—Mary Beth Franklin, CFP®, President, RetirePro LLC
“With his new book, Bill Bengen, aka “Mr. 4%”, takes the reader with him down his rabbit hole on a journey to a new SAFEMAX portfolio withdrawal rate of 4.7%. He masterfully takes us there using new data and research that is, at the same time, consumer facing and financial advisor friendly. His eight elements of a personal retirement withdrawal plan are wonders of the modern financial planning landscape. Bravo “Mr. 4.7%”!”
—Bill Yount, MD, Creator and Cohost, Catching Up to FI
“William Bengen pioneered the 4% rule, and now he's taking it to the next level. In this indispensable guide, he refines decades of research to help retirees spend more, worry less, and enjoy a richer retirement. Scientifically sound and highly readable, this book is a game‐changer for anyone managing retirement income.”
—Ryan McLean, Founder, Investments Illustrated
“Retirement is filled with uncertainty, and there are no guarantees in the stock market. Bengen's A Richer Retirement serves as a practical guide for investors and retirees who want to minimize risk while maximizing their retirement.”
—Donna Skeels Cygan, CFP®, Author of The Joy of Financial Security
“Bill Bengen is the foremost retirement researcher of our time. A Richer Retirement provides the tools, knowledge, and—most importantly—the confidence to live the life you deserve.”
—Sam Dogen, founder of Financial Samurai and bestselling author of Buy This, Not That and Millionaire Milestones
“Starting in 1994, Bill Bengen has managed to frame both the investment and spending guardrails that retirees should reasonably rely on when analyzing how they should structure their lifestyles from an economic standpoint after they stop working.”
—Evan Simonoff, Editor‐in‐Chief, FA Magazine
A RICHER RETIREMENT
SUPERCHARGING THE 4% RULE TO SPEND MORE AND ENJOY MORE
WILLIAM P. BENGEN
Copyright © 2025 by William P. Bengen. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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ISBN 9781394343171 (cloth)
ISBN 9781394343188 (ePub)
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Author Photo: Courtesy of Christina M. Bengen
To Barbara, my wife
“How, oh how, did we ever find one another”
INTRODUCTION
Will I outlive my money? That question haunts many retirees, particularly those who depend on an investment portfolio to provide a significant portion of their retirement income. It's natural to feel a bit fearful, as for the first time in their lives, most retirees face the prospect of living off only accumulated assets, pension plans, annuities, and Social Security, with limited opportunities for augmenting their lifestyle through employment income. This sense of lack of control over one's future can be unsettling.
Having retired for over ten years, I can attest to these feelings. But the question of outliving one's money intrigued me earlier than most. As a fledgling (but not young) financial advisor in the early 1990s, I helped my clients plan for retirement. Understanding what kind of lifestyle could eventually be supported by my clients' growing retirement accounts became essential, as well as how to optimize their investments within those accounts. Above all, I had to determine how much my clients could safely withdraw each year from their retirement accounts for their entire retirement; in other words, how could I help them not run out of money?
Finding answers to those issues was far more challenging than I had ever imagined. Today, I would immediately search the internet for assistance, but in the early 1990s, that was still a crude research tool. Thus, as a newly minted CFP®, I turned confidently to the half‐shelf of financial textbooks I had accumulated from my courses. Astonishingly, I found no guidance whatsoever on the topic. Next, I paged through dozens of financial publications. Again, no help.
Finally, I consulted some of the more experienced advisors in my geographic area (San Diego). I was perplexed at the wide range of answers I received: suggestions were made to withdraw anywhere from 3% to 8% of the portfolio value annually. In addition, some advisors felt clients should invest heavily in stocks during retirement to maximize investment returns and, thereby, withdrawals, while others pooh‐poohed the use of stocks at all. Too risky, they opined. It is better to have an all‐bond portfolio and enjoy the comfort of a guaranteed income. I was utterly perplexed.
In retrospect, I should not have been surprised at the lack of reliable information available. After all, the issue of “sustainable withdrawals” was just emerging as a major concern of the financial planning profession. The youngest members of the Baby Boomers, born in the late 1940s, were still about twenty years from retirement and were just beginning to think seriously about it. In addition, their generation (also mine) was the first required to contemplate the need for an extended period of non‐working income during retirement. Earlier generations rarely lived more than ten years in retirement, so they could literally spend without fear of outliving their money. Thus, their financial advisors, if they even used one, were under no pressure to develop solutions to a problem that until recently hadn't existed.
It was clear to me, however, that the problem was now real, and was heading toward me and my clients like a runaway freight train. Having been educated as an engineer, I viewed it as a challenge, an obstacle to overcome, and with nowhere else to turn, I decided to tackle it on my own. I bought a database of historical returns of various investments and inflation, sat down before my computer, fired up my Lotus 1‐2‐3 spreadsheet (this was 1993, after all!), and began my research.
I published my first paper on the topic in the October 1994 issue of the Journal of Financial Planning, which, unintended by me, gave rise to the term “the 4% rule.” Over the last 30 years, I've authored numerous papers on sustainable withdrawals, published a book on the topic (2006), spoken at many financial planning conferences and financial podcasts, and been interviewed by reporters from all the major financial media. I am still amazed at how this has all grown. Interest in the topic seems to continue to expand, not diminish.
My purpose in this book is to provide you, my fellow retirees and aspiring retirees, with the tools required to create and manage a plan for generating income from your retirement investment accounts so they will last your entire lifetime. The process I have developed is the product of thousands of hours of study and rigorous field‐testing. It emphasizes getting every last bit of “juice” out of your retirement investments without taking unnecessary risks. If you are one of the fortunate few who can live on 1% annual withdrawals, this book is not for you. It is for the person who has labored and saved their whole life and seeks to enjoy life to the fullest in retirement.
This work is more than just an update to my 2006 book, “Conserving Client Portfolios During Retirement.” It incorporates all I have learned about the subject over the last 30 years, especially critical discoveries made relatively recently. Fortunately, many excellent researchers have entered the field in recent years, and I've included (with credit due) material from their work, which I believe will be helpful to you.
I wrote my 2006 book for financial advisors, thus its formal‐sounding title. I'm retired from financial advising, but over the years, I've received (and continue to receive) many inquiries about my research from non‐professionals. Thus, I decided to write this book for the general public. To that end, I've adopted a conversational tone and avoided professional jargon. Where jargon was inescapable, I tried to explain the concept straightforwardly.
I rely heavily on charts to illustrate my ideas, and I hope you find them useful. I intend to guide you through my thought processes and results as if I were discussing a subject of keen interest with a friend. Please join me on this journey in the same spirit. If you're a financial advisor, I expect you will also find a lot of material of interest in these pages.
Let's preview the contents of this book. In Chapter 1, I'll provide some general background about my methodology, including a historical perspective on stock bear markets, inflation, and withdrawal rates. In Chapter 2, I'll introduce the concept of “SAFEMAX” and explain how I determined that withdrawal rates are closely linked to stock market valuations and the inflationary environment.
In Chapter 3, I'll present the eight Elements of a personal retirement withdrawal plan and discuss why the term “rule” is applicable only when numerous assumptions are specified. In Chapters 4 through 11, we'll examine each of these eight Elements in detail and how modifying them affects your personal withdrawal rate.
In Chapter 12, we'll “put it all together” and create some sample plans, including introducing the “current withdrawal template,” a powerful management tool. We'll also test these plans under adverse conditions, identify potential problems, and explore modifying the plans to resolve those issues successfully.
In Chapter 13, we'll study some important issues that don't fit neatly into the preceding chapters. Finally, in Chapter 14
