Is The Safe Withdrawal Rate Useful? EDU #2618
The Retirement and IRA Show
Jim Saulnier, CFP® & Chris Stein, CFP®
4.3 • 729 Ratings
🗓️ 6 May 2026
⏱️ 82 minutes
🧾️ Download transcript
Summary
Chris’s Summary
Jim and I discuss the Safe Withdrawal Rate as a projection tool before retirement, but not as the distribution tool we would use for many retirees. We address Bill Bengen’s research, the 1968 retiree scenario, Monte Carlo planning, and why a worst-case floor can limit early retirement spending on fun. We also contrast accumulation planning with distribution planning and explain how the See Through Portfolio
helps separate different retirement spending needs.
Jim’s “Pithy” Summary
Chris and I discuss why we think Bill Bengen’s research has real value, while still believing the Safe Withdrawal Rate is the wrong tool once the rubber meets the road in retirement. His work helped advisors move away from unrealistic withdrawal rates, and it can be useful for people still in the accumulation phase who are trying to see if they are on track. But once someone reaches retirement, especially with only so many Go-Go years ahead, I think the tool has to change.
The part I don’t like is when the industry takes a worst-case historical number and turns it into the anchor for everyone. Chris and I talk about Bengen’s own comments, Monte Carlo probability statistics, and why software can make this kind of planning look cleaner than it really is. That may work for some people, especially if the goal is to leave the biggest portfolio possible, but that is not the same as helping someone spend with more clarity while they still have the health, desire, and ability to do so.
That is where our process separates the money allocated for needs, reserves, and later-life planning from the money available for fun. Minimum Dignity Floor, SEAL Reserve, and the Fun Number help frame those dollars differently instead of treating retirement as one big portfolio with one smooth withdrawal path. You are not getting younger, stronger, or healthier, and most people’s retirement goals don’t include being the wealthiest person in the graveyard.
The post Is The Safe Withdrawal Rate Useful? EDU #2618 appeared first on The Retirement and IRA Show.
Transcript
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| 0:52.9 | Join us as certified financial planner Jim Sondier, as well as Colorado State University Finance instructor and certified financial planner Chris Stein, teach you about IRAs, |
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| 1:12.5 | Jim and Chris want you to know that they're available to help you plan for your retirement. Just visit their website at JimHelps.com. |
| 1:18.6 | That's Jim H-E-L-P-S dot com and click the Meet the Team button on the homepage. Now here's Jim |
| 1:25.8 | and Chris with today's show. |
| 1:30.5 | Well, hello everybody and welcome to the Retirement and IRA show, EDU edition for this week. |
| 1:36.8 | Our EDU topic for this week was prompted by a handful of emails we got from listeners |
| 1:43.6 | regarding... by a handful of emails we got from listeners regarding our occasional commenting. |
| 1:50.1 | I'd say it's more than occasional. |
| 1:52.3 | It comes up fairly frequently because it's such a predominant way of thinking in our industry, |
| 1:58.1 | in the financial planning slash financial advising space, the concept of the safe |
| 2:04.4 | withdrawal rate or what some people just call the 4% rule, which is just in honor of, |
| 2:12.6 | if you will, Bill Bengan's research that was released back in 1994. |
... |
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