By Kevin Cooper:

In 1994, financial planner William P. Bengen analyzed different withdrawal rates and asset allocations to determine the optimum rate which could be sustained over a 30 year retirement period beginning every year from 1926. Using a portfolio split evenly between stocks and bonds, he determined that an initial withdrawal of 4% adjusted annually for inflation could allow the retiree to continue withdrawals for up to 30 years without exhausting his funds. In the years since Mr. Bengen published his results, the 4% rule has become the generally accepted “rule of thumb” for retirement planning.

The 4% rule has been analyzed, modeled, modified, praised and debunked. It’s been modeled with various asset allocations and today we can find results that show recommended initial withdrawals rates ranging from 1.7% to 7.5%. But the basic and generally accepted model is that you can begin with a first year withdrawal of 4% and increase

Complete Story »

By Kevin Cooper:

In 1994, financial planner William P. Bengen analyzed different withdrawal rates and asset allocations to determine the optimum rate which could be sustained over a 30 year retirement period beginning every year from 1926. Using a portfolio split evenly between stocks and bonds, he determined that an initial withdrawal of 4% adjusted annually for inflation could allow the retiree to continue withdrawals for up to 30 years without exhausting his funds. In the years since Mr. Bengen published his results, the 4% rule has become the generally accepted “rule of thumb” for retirement planning.

The 4% rule has been analyzed, modeled, modified, praised and debunked. It’s been modeled with various asset allocations and today we can find results that show recommended initial withdrawals rates ranging from 1.7% to 7.5%. But the basic and generally accepted model is that you can begin with a first year withdrawal of 4% and increase

Complete Story »