Retirees may now safely spend more. Bill Bengen, originator of the 4% rule, has raised his safe withdrawal benchmark to 4.7%, a 17.5% increase in sustainable income for retirement portfolios.
PITTSBURGH, Aug. 20, 2025 /PRNewswire-PRWeb/ -- William Bengen, originator of the "4% rule" for safe retirement withdrawals, has released new research raising his suggested rate to 4.7%—a shift that could mean a 17.5% increase in sustainable annual portfolio withdrawals.
For a $1 million retirement portfolio, the increase from 4.0% to 4.7% translates to about $7,000 more per year before taxes that retirees could potentially spend without increasing the risk of running out of money.
Important Assumptions: Bengen's 4.7% figure applies to withdrawals from retirement investment accounts only and is based on a 30-year planning horizon, periodic withdrawals throughout the year, portfolio rebalancing, and a diversified allocation of roughly 55% stocks, 40% bonds, and 5% cash. Results are based on historical U.S. market data and do not include Social Security, pensions, annuities, or other income sources.
A Refresher: What Is the 4% Rule?
In 1994, Bengen set out to answer a critical retirement question: "How much can you withdraw from your savings each year without running out of money?"
His research revealed that retirees could:
- Withdraw 4% of their initial portfolio value in the first year of retirement.
- Increase that amount annually to keep pace with inflation.
- Maintain this strategy through both bull and bear markets, with funds lasting at least 30 years in nearly every historical scenario.
For three decades, this "4% rule" has been the gold standard of retirement planning. Bengen's latest analysis, detailed in his new book, "A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More" (Wiley, 2025), updates that benchmark to 4.7% based on revised portfolio allocation assumptions and expanded market data.
Beyond 4.7%: Strategies to Further Improve Retirement Outcomes
Bengen's new analysis is groundbreaking. James Lange, CPA/Attorney, emphasizes that retirees can often go further. By combining Bengen's framework with advanced planning strategies, many households can potentially raise lifetime income, reduce taxes, and leave a larger estate. These strategies include:
- Strategic Roth IRA, 401(k), and 403(b) conversions
- Coordinated Social Security with Roth conversion strategies
- Strategic annuitization (including unique TIAA opportunities)
- Leveraging home equity as a retirement resource
- Optimized estate planning for married couples
"This 17.5% increase applies to portfolio withdrawals alone," says Lange. "When you integrate Roth conversions, Social Security optimization, tax reduction, and annuitization strategies, retirees can push their effective income even higher—without increasing risk and while potentially leaving more to their heirs."
Accessing the Full Story
On September 18, 2025, Bengen will join Lange live (via Zoom) during a special in-person retirement workshop in Pittsburgh, Pennsylvania. Local attendees will hear directly from Bengen about his updated research, while also receiving copies of both, "A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More," and Lange's "Retire Secure for Professors and TIAA Participants". For details and registration, visit https://PayTaxesLater.com/2025Workshops.
About Bill Bengen
Bill Bengen originated the 4% rule in 1994, pioneering the first research-based framework for safe retirement withdrawals. His work has shaped modern financial planning worldwide and remains the foundation of retirement income research.
About James Lange
James Lange, CPA/Attorney, is the founder of Lange Financial Group, LLC in Pittsburgh. He is the author of 10 best-selling retirement and tax planning books and has been quoted 36 times in The Wall Street Journal.
Learn More
- Purchase Bill's book, A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More
- For residents of southwestern PA, register for the September 18th workshop: https://PayTaxesLater.com/2025Workshops
Key Disclosures and Assumptions:
- Results are based on historical U.S. market data from 1926–1992, assuming a 30-year retirement horizon, annual rebalancing, and fixed real withdrawals adjusted for inflation.
- Asset allocation assumptions: Old analysis assumed 50–75% equities with the balance in intermediate-term government bonds; new analysis incorporates updated historical data and expanded asset classes.
- Portfolio mix example: 50% large-cap U.S. stocks, 50% intermediate-term U.S. government bonds.
- Success definition: Portfolio not depleted before 30 years in historical backtesting.
- Both rules are based on historical worst-case scenarios. Actual results will depend on market conditions, inflation, taxes, and individual circumstances.
- Past performance does not guarantee future results.
- This analysis reflects sustainable portfolio withdrawals and does not account for Social Security, annuities, or other income sources.
- This is not individualized financial advice. Investors should consult their own advisors before making decisions.
Media Contact
Sandra Proto, Lange Financial Group, LLC, 1 412-521-2732 220, [email protected], https://PayTaxesLater.com
SOURCE Lange Financial Group, LLC
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