Retirees Can Spend More, Says the Creator of the 4% Rule

Bill Bengen, who created the 4% retirement rule, updates his guidance by suggesting a higher starting withdrawal—about 5.5%—given current stock-market strength and higher starting valuations. The rule was designed to survive worst-case scenarios, but recent research argues 4% may be too conservative and could leave retirees with more money than needed. Many savers under-spend due to fear of running out of money (FOROM), and with a sizable nest egg and favorable market conditions, spending more in retirement can be sustainable, though individual circumstances matter.