The father of the 4% rule says 4% is likely much too low.

You're listening to the Saturday personal finance edition of Motley Full Money.

I'm Robert Brokamp. And this week, we're going to do things a little bit differently.

We're going to forego our last week in money and get it done segments and just feature a guest

interview.

And that guest is none other than William Bangin, the financial planner whose research established

4% as the safe withdrawal rate in retirement. Bill and I talk about his

new book, why most retirees can withdraw more than 4%, how factors such as market valuation and

inflation affect the safe withdrawal rate, and whether retirees should decrease or increase their

allocation to stocks as they get older. If you ask the typical investor how much someone can safely withdraw in the first year of retirement,

the answer they'll likely give is 4%.

That rule of thumb has been around since 1994, thanks to the research report published by a financial

planner named William Bangon.

Over the subsequent three decades, Mr. Bangon has done a lot of additional research, which he has summarized in his excellent new book, A Richer Retirement, Supercharging the 4% Rule to spend more and enjoy more. Bill, welcome to Motley Full Money. Hey, thanks for inviting me. I'm looking forward to it. Well, we're looking for it, too. Let's start with a little bit of your history. You got a degree in aeronautics

and astronautics from MIT, but instead of working in the space industry, you joined a family-owned

soda bottling business and eventually became the president. The company was sold in 1987,

and you started a whole new career in your 40s as a financial planner. So what led you to the

financial planning profession

and then eventually your research into withdrawal rates?

Well, I never used the financial advisor

and they were still a new concept at that time.

And I figured that if I was going to have to deal

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