We Changed The 4% Rule!?
7/8/20261 hr 9 min
Retirement planning isn't as simple as following the classic 4% rule anymore. In this video, Brian and Bo explain why the traditional retirement withdrawal strategy deserves an update, how William Bengen's latest research changes the conversation, and why your retirement age should determine your safe withdrawal rate. Whether you're planning for early retirement, traditional retirement, or retiring later in life, you'll learn how withdrawal rates, portfolio longevity, inflation, and retirement income all work together to build a sustainable financial plan. Plus, see our updated retirement withdrawal framework and discover tools that can help you estimate your retirement goals more confidently.
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Clips
Transcript preview
First 90 secondsBrian Preston· Host0:00
[gentle music] You heard it here first. We changed the 4% withdrawal rule Brent, I am so excited about this, 'cause I think this is gonna be incredibly valuable, 'cause a lot of people out there are excited about retirement and, and even a lot of people are excited about early retirement.
Bo Hanson· Host0:20
They're trying to figure out, how do I know if I have enough? How do I know if I've reached that point? And I worry that some people arrive at a poor conclusion because they're using the wrong input.
Brian Preston· Host0:33
Well, look, everybody wants a napkin financial plan, and wouldn't it be great if all you had to do was say, "You know what? If you can just take what you think you need and multiply it by 25- That'll get you there ... you got a retirement" Yep That's essentially what the 4% withdrawal rule is. Because if you think about doing the math, what's four times 25, 100%. You should be covered and set, and, and that we want to show you, no, there is way more going on when you're trying to figure out than just doing a napkin financial plan.
Bo Hanson· Host1:00
Yeah, said slightly differently, it's a retirement guideline that suggests withdrawing 4% of your portfolio in the first year of retirement, then you get to adjust that amount every year for inflation. So you build up this big pot of money, you take that big pot of money, you multiply by 4%, and that is what you get to live off in- of in retirement. That's what a lot of people have used, and that's what a lot of people use for their planning.
Brian Preston· Host1:25
But where did the 4% rule come from?
Bo Hanson· Host1:27
Yeah, it actually came from a financial advisor.