You’ve saved and stashed away your money for years. Now it’s time to begin making withdrawals rather than deposits. But how much can you afford to take out and be sure the money lasts as long as you do?
Retired financial advisor William Bengen began noodling over that question more than 30 years ago. He devised what became known as the “4% rule,” although he maintains it was always more of a guideline than a strict formula.
Over the years, plenty of advisors and pundits have questioned whether the 4% rule still holds.
“I’ve never been a fan of treating the 4% rule like it was handed down on stone tablets because retirement simply doesn’t work that way in the real world,” said Steven Crane, a financial planner at Financial Legacy Builders in Fairborn, Ohio, in an email.
“The rule is an incredible starting point, and Bill Bengen changed the industry forever, but I’ve always viewed it as a planning assumption instead of a withdrawal prescription because no retiree actually lives a textbook retirement,” he added.
[Read: If You Want to Retire in 2026, Here’s What You Need to Prep Now]
Updating the “Rule”
To address that question and update his research to include a more diversified portfolio than he originally assumed, Bengen last year published “A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.”
In the book, Bengen increased the baseline safe withdrawal rate for a 30-year retirement to 4.7% from 4%.
The New Methodology
When Bengen introduced the idea of a 4% withdrawal rate, he began with a simple 50/50 mix of large-capitalization U.S. stocks and bonds. Then he looked at every historical 30-year retirement period going back to 1926 to determine what withdrawal rate would make the portfolio last for that entire time.
In his 2025 book, Bengen arrived at a new withdrawal rate of 4.7% after swapping that simple 50/50 stock-and-bond mix for a more diversified portfolio. These days, he’s including seven asset classes in a broad portfolio composed of 55% stocks, 40% bonds and 5% cash.
On a $1 million portfolio, an initial 4.7% withdrawal rate means income of $47,000 in year one. That’s a $7,000 increase over what the 4% rule would yield. According to Bengen’s research, broader diversification supports the higher withdrawal rate.
[Read: Alternatives to the 60/40 Portfolio.]
Making the Money Last
Living beyond 100 is highly unlikely today, but it happens on occasion. Say someone retires at 60 but lives to 110. Does the higher withdrawal rate of 4.7% support that length of time?
“Let’s assume that represents a 50-year planning horizon, compared to the 30-year horizon I have frequently used in the past,” Bengen said in an email.
Throughout his research, Bengen has used the term “safemax” to describe the concept of a maximum initial safe withdrawal rate.
“For the 30-year horizon, a safemax rate of 5.81% would apply,” he said. “For the 50-year horizon, a safemax of 5.01% would apply. Thus, the longer horizon requires a cut in safemax of about 13%.”
That assumes, he added, a tax-deferred portfolio, leaving no legacy, a 65% allocation fixed in stocks, moderate inflation and today’s high stock market valuation.
Going from a 30-year plan to a 50-year plan would cost retirement savers about 13% of their withdrawal rate as they drop from taking 5.81% down to 5.01%.
“This reduction in safemax can be thought of as an insurance premium to protect your investments from exhaustion,” Bengen said.
Don’t Forget the Tax Treatment
Two more points from Bengen address details on applying the rule in practice.
“My original 4% rule assumes a tax-deferred portfolio, so taxes arise only when money is withdrawn. Thus, the 4% can be considered pretax,” he said.
Also, for investors pulling money from taxable accounts instead of a tax-advantaged account like an individual retirement account, or IRA, the actual spendable rate would be lower.
That distinction matters most for retirees spreading their withdrawals across account types. A dollar pulled from a taxable brokerage account nets out differently than a dollar from a traditional IRA, which is taxed differently still than a dollar from a Roth.
[Read: How to Convert to a Roth IRA]
The Rule as a Starting Point
There are nuances that retirement savers should keep in mind. This is where a financial planner can provide objective guidance.
For example, Chris Chen, a certified financial planner and wealth strategist at Insight Financial Strategists in Newton, Massachusetts, cited the idea of increasing stock exposure in retirement, something Bengen advocates for in “A Richer Retirement.”
Chen said investors should be cautious when implementing this approach.
“The rising glide path method is like the thought of beating the system. It’s exceedingly attractive, but will it work for everyone?” he said in an email.
For some investors, their needs and ratio of stocks to bonds may increase over time for reasons such as leaving a job, passing along a legacy early or encountering unexpected expenses. Getting the extra return from stocks versus bonds may help make the money last, but it may also have pitfalls.
“A rising glide path may increase a portfolio’s risk beyond what is prudent. We need to remember that the risk is what it can do in the short term, not the benefits it may bring later,” Chen said.
“If we are going to go with rule-of-thumb financial planning, we should check first that it fits the client’s fact pattern,” he said. “I think Bill Bengen would agree with that.”
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The 4% Rule No Longer Works for Retirees, Says the Man Who Invented It originally appeared on usnews.com
Update 07/29/26: This story was published at an earlier date and has been updated with new information.
