Is 4.7% the New Safe Retirement Withdrawal Rate?
Bill Bengen’s latest research shows that adding asset classes allows for a higher withdrawal rate in retirement than 4%.
Charles Rotblut leads a class in AAII's new Essential Investing Video Course. Go to https://www.aaii.com/ves for more information and to subscribe.
SAFEMAX defines the highest safe initial withdrawal rate based on portfolio conditions and inflation, now estimated at 4.7%
Portfolio diversification and inflation strongly impact withdrawal safety; optimal stock allocation ranges from 46% to 73%
Adjusting withdrawal plans is essential; retirees should monitor actual vs. projected rates to maintain financial sustainability
William “Bill” Bengen is a retired financial planning practitioner. His groundbreaking research into retirement withdrawal rates led to what has been known as the 4% rule (raised to 4.5% and now 4.7%). Cynthia McLaughlin and I spoke to him about the updated insights into withdrawal rates in his latest book, “A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More” (Wiley, 2025).
—Charles Rotblut, CFA