William Bengen
added citation
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==Withdrawal rate== |
==Withdrawal rate== |
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{{main|Withdrawal rate}} |
{{main|Withdrawal rate}} |
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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 ''Journal of Financial Planning''.{{cite book|last=Birken|first=Emily Guy|title=The Five Years Before You Retire: Retirement Planning When You Need It the Most|url=https://books.google.com/books?id=WXXlAQAAQBAJ&pg=PA46|year=2014|publisher=Adams Media|isbn=9781440569722}}{{Rp|46}} He is also the author of the book ''Conserving Client Portfolios During Retirement'', where he revised and updated his analysis. He gave a brief update in {{harvtxt|Bengen|2012}}. 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 recession and high [[inflation]] 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.Brett Arends (20 October 2023) [https://www.marketwatch.com/story/the-inventor-of-the-4-rule-just-changed-it-11603380557 Opinion: The inventor of the ‘4% rule’ just changed it]. Marketwatch.com, accessed 03 November 2023 |
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.{{Cite web |last=Gillies |first=Jordan |date=2026-03-06 |title=Is £2 million enough? : How much do you need to retire... |url=https://www.saltus.co.uk/the-financial-planning-blog/pensions-and-retirement-planning/is-2-million-enough |access-date=2026-04-21 |website=Saltus |language=en}} He published his research in the October 1994 issue of the ''Journal of Financial Planning''.{{cite book|last=Birken|first=Emily Guy|title=The Five Years Before You Retire: Retirement Planning When You Need It the Most|url=https://books.google.com/books?id=WXXlAQAAQBAJ&pg=PA46|year=2014|publisher=Adams Media|isbn=9781440569722}}{{Rp|46}} He is also the author of the book ''Conserving Client Portfolios During Retirement'', where he revised and updated his analysis. He gave a brief update in {{harvtxt|Bengen|2012}}. 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 recession and high [[inflation]] 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.Brett Arends (20 October 2023) [https://www.marketwatch.com/story/the-inventor-of-the-4-rule-just-changed-it-11603380557 Opinion: The inventor of the ‘4% rule’ just changed it]. Marketwatch.com, accessed 03 November 2023 |
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The withdrawal rate has since become a staple of the financial service industry, adopted by several major financial firms. |
The withdrawal rate has since become a staple of the financial service industry, adopted by several major financial firms. |
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