Bill Bengen: How to Monitor and Adjust Withdrawal Plans

Bill BengenBill Bengen has continued his groundbreaking research into retirement strategies. He has developed a framework for retirees to monitor and adjust withdrawals based on inflation and market performance.

Bengen was a keynote speaker at the Insider’s Forum, the conference run by Bob Veres and Jean Sinclair that took place last week in San Antonio. Veres aptly introduced Bengen as one of the few “genuinely transformative people in the advisory profession.”

Bengen’s research originally sought to answer a simple question, “How much can you withdraw from your retirement portfolio?”1 His seminal research was published in 1994, featuring what became known as the “4% rule.” He was the first person to explore that question systematically and rigorously, and it has been studied by many others over the last 30 years.

In 2021, he determined that the safe withdrawal rate (SWR) was approximately 4.7%, based on a 50/50 portfolio of stocks and bonds and then-current equity valuations and interest rates.

His research since then has focused on a methodology to develop a plan based on a withdrawal rate, monitor it, identify deviations and decide what corrections to take.

Eight factors go into the design of a withdrawal plan, and Bengen reviewed each one and how various assumptions affect outcomes.