153: Bill Bengen (The Inventor of the 4% Rule) Talks Retirement, Past Crashes, and How You Can Withdraw Even More!

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 30 November 2020

⏱️ 64 minutes

🔗️ Recording | iTunes | RSS

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Summary

He really is the man who needs no introduction (but here’s one anyways). Bill Bengen, the inventor of the 4% rule (and personal finance hero of Mindy & Scott) stops by the Money Podcast to talk about how he calculated his famed 4%, how he managed his client’s portfolios, and how the 4% has aged throughout the past three decades.

In his Original Article from the Journal Of Financial Planning, October 1994, Bengen outlined a groundbreaking calculation: a 4% withdrawal rate from your retirement accounts is all you need to comfortably retire (if enough is saved up). Bengen was hit with praise and criticism, but is still applauded to this day for having such a simple yet crucial metric for knowing how & when you can retire.

Using over 200+ retirement account portfolios spanning decades of time as research, Bengen still says with confidence, the 4% rule is a winner! He has the proof and we couldn’t agree more.

Whether you’re a few years or a few decades away from retirement, this episode features life-changing advice from one of the leaders in financial research. This is an episode you won’t want to miss!

In This Episode We Cover

What the 4% rule is
How Bengen came up with the 4% rule and why it stands the test of time
How inflation becomes the “thief in the night” for many investors
The best (and worst) times to invest
How to stay the course during financial downturn
Which asset classes boost great returns and withdrawal rates
Steering clear of “1 more year syndrome”
The importance of rebalancing your portfolio
How to not accumulate too much wealth for retirement
Why everyone needs to learn how to be a saver, so they can enjoy life!
And So Much More!

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Transcript

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0:00.0	Welcome to the bigger Pockets Money
0:01.6	podcast show number 153,
0:04.0	where we interview the father,
0:06.3	the inventor of the 4% rule Bill
0:09.3	Bangan and talk about safe
0:11.2	withdrawal rates from the man,
0:13.2	the myth, the legend himself.
0:15.1	As you lengthen the time horizon,
0:17.5	you start out 4.5% for 30 years,
0:20.7	and you go to 40, 50.
0:23.0	And finally, what I call
0:24.4	the mathuzel client who's going to
0:26.1	live forever still is 4%.
0:28.2	It approaches a minimum of 4%
0:30.2	doesn't go below that.
0:31.9	And that is a worst case scenario.
0:34.3	That's if you're retiring into a time
0:36.2	where there's high inflation
0:37.4	and terrible bill markets.
0:39.4	4%, I think you can do better than that
0:42.0	if you're careful about managing your investments
0:45.2	and choosing a good time retire
	...

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