Talk of The Villages Florida - View Single Post - Does the 4% rule of withdrawals still apply?
Thread: Does the 4% rule of withdrawals still apply?
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Old Yesterday, 09:11 AM
manaboutown manaboutown is offline
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Quote:
Originally Posted by Caymus View Post
Saturday's Motley Fool Podcast had an interview with the inventor of the 4% rule (William Bengen). He said the basic safe case is 4.7% but depending on portfolio makeup can be much higher. He claims that there is an optimum ratio of equities/fixed income to maximize the safe payout.

He just released a new book.

I have been reading the book and am about half way through. The book contains many graphs which illustrate when one retires makes a huge difference in how large safe withdrawals may be. The higher the Shiller CAPE at retirement the lower the safe withdrawal percentage. Right now we are off the charts on the high side of the Shiller CAPE so there is no historical data he could analyze (page 38).

BTW Bengen's chosen optimum portfolio is 55/40/5 - equities/bonds/cash.
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Last edited by manaboutown; Yesterday at 01:07 PM.
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