Bill Bengen was a financial planner in the early 1990s who confronted the question that often puzzles aspiring retirees: “When I get to retirement, how much can I spend?”
For his baby boomer clients at the time, there was little expert guidance on the subject. Bengen decided to investigate himself, and in 1994 published his findings in the Journal of Financial Planning under the title Determining Withdrawal Rates Using Historical Data.
The article demonstrated that a 4% initial withdrawal rate from a tax-advantaged account had never failed to allow the account to last for at least 30 years, based on data going back to 1926. And thus, the “4% Rule” was born.
Bengen continued to refine his research. His 2025 book, A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More, argues for a new “4.7% Rule”.
Importantly, Bengen reminds retirees that inflation is their “greatest enemy” and emphasizes that retirees must consistently adjust their withdrawals for the higher cost of living.
Bengen’s book is foundational for financial planners and will be of interest to individuals who want to explore the research behind the 4% Rule.
Bengen was recently interviewed by Morningstar, and you can listen to the discussion on the May 19 episode of Morningstar’s The Long View podcast.