{"id":140069,"date":"2025-08-12T16:12:20","date_gmt":"2025-08-12T16:12:20","guid":{"rendered":"https:\/\/www.europesays.com\/us\/140069\/"},"modified":"2025-08-12T16:12:20","modified_gmt":"2025-08-12T16:12:20","slug":"new-retirement-rule-spend-more-safely-than-4","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/140069\/","title":{"rendered":"New Retirement Rule: Spend More Safely Than 4%"},"content":{"rendered":"

\"Mature <\/p>\n

\n courtneyk \/ iStock\/Getty Images <\/p>\n

Commitment to Our Readers<\/p>\n

GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n

\"\"<\/p>\n

20 Years<\/strong>
Helping You Live Richer<\/p>\n

\"\"<\/p>\n

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Trusted by<\/strong>
Millions of Readers<\/p>\n

The \u201c4% Rule\u201d has guided retirees<\/a> for decades, but its creator, William P. Bengen, now says it\u2019s outdated.<\/p>\n

In his new book, \u201cA Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More,\u201d<\/a> Bengen introduces a more generous and flexible approach to retirement withdrawals, tailored to today\u2019s volatile economy. <\/p>\n

Here\u2019s how to retire richer<\/a>, according to the man who wrote the rulebook.<\/p>\n

Choose the Right Retirement Withdrawal Rate<\/p>\n

It\u2019s important to be realistic about the withdrawal rate you choose.<\/p>\n

\u201cMy research suggests that \u2018safe\u2019 withdrawal rates are closely correlated with stock market valuation and inflation,\u201d Bengen told GOBankingRates.<\/p>\n<\/p>\n

This means the higher the stock valuation, the lower your withdrawal rate<\/a> should be and vice versa, and the higher the inflation rate, the lower your withdrawal rate should be and vice versa. <\/p>\n

\u201cThe best time to retire is into a period of low stock market valuation and low inflation \u2014 neither of which apply to the current situation,\u201d Bengen said.<\/p>\n

Why You Can Safely Spend More Than 4%<\/p>\n

The \u201c4% Rule\u201d specifies a first-year withdrawal of 4% of your portfolio value, augmented by cost of living increases each subsequent year, similar to Social Security<\/a>. <\/p>\n

\u201cAlthough this rule was recently upgraded to 4.7%, it is still too conservative for the current environment,\u201d Bengen said. \u201cI recommend a rate between 5.25% and 5.5% for current retirees, although this could change based on stock market valuation and inflation expectations. The 100-year average is 7%, so we are still paying a price for high market valuations.\u201d<\/p>\n

Stay Invested \u2014 Even During Market Downturns<\/p>\n

The stock market tends to trend upwards over time, so you shouldn\u2019t panic sell during downturns<\/a>.<\/p>\n

\u201cDon\u2019t be scared out of stocks because of a bear market,\u201d Bengen said. \u201cThose kinds of events are incorporated into the determination of your withdrawal rate.\u201d <\/p>\n

If you tend to be more risk-averse, consider subscribing to a risk management service that recommends adjustments to stock exposure based on an assessment of market risk. <\/p>\n

\u201cThis should reduce your losses, although the subsequent gains may also be reduced,\u201d Bengen said.<\/p>\n

Protect Your Nest Egg From Inflation<\/p>\n

During levels of high inflation<\/a>, it\u2019s important to reduce your spending as much as possible, especially when you are living on a fixed income.<\/p>\n<\/p>\n

\u201cThe lesson learned from the 1970s inflation surge was that cutting expenditures immediately can help preserve your nest egg,\u201d Bengen said. \u201cDon\u2019t delay. You can always increase spending later.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"courtneyk \/ iStock\/Getty Images Commitment to Our Readers GOBankingRates’ editorial team is committed to bringing you unbiased reviews…\n","protected":false},"author":3,"featured_media":140070,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,8726,255,615,700,67,132,68],"class_list":{"0":"post-140069","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-gobankingrates","10":"tag-personal-finance","11":"tag-planning","12":"tag-retirement","13":"tag-united-states","14":"tag-unitedstates","15":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115016679042643764","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/140069","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=140069"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/140069\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/140070"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=140069"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=140069"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=140069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}