Is 3% the new 4%? Bengen rule of thumb questioned

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For the longest time, Robert Bengen’s 4% annual withdrawal rule (plus an inflation adjustment) was the gold standard for simplicity in estimating SAFEMAX: a safe annual maximum withdrawal rate  from retirement nest eggs that minimizes the odds of having to break sharply into principal at too fast a rate, thereby leaving little or nothing in advanced old age.

Of late, there’s been a lot of articles questioning this rule. Actually, it’s been going on for awhile.  The following piece from Investment News goes back to early 2012. You may have to register to read the full piece but it’s free once you enter your email and probably worthwhile to bookmark them anyway. And you might want to do the same here at the Financial Independence Hub too!  — JC

Here’s the article.

P.S. This would be a good topic for our forums, which we hope to have up and running this week. Stay tuned!

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