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Grow Money Business with Grant Bledsoe

Dec 18, 2019

In today’s episode of Grow Money Business Grant covers the genesis of the 4% retirement spending rule and whether it still applies today.  We dive into updates to the initial research surrounding the 4% rule, how well the rule has held up over time, and what you might want to consider as you approach your own transition into retirement.

[02:15] Bill Bengen's 4% Rule - Grant talks about one of the earliest research papers published on this matter.

[04:12] The origins of the 4% retirement rule – How Bill Bengen came up with the 4% rule and nuts & bolts of the research.

[08:47] Updates to the 4% rule – The author, Bill Bengen made several revisions to his paper to include the effects of recent developments in the economy. Grant discusses what lead to these revisions.

[13:15] Michael Kitces on the 4% rule – Michael Kitces is another financial planner who carried out extensive research on the 4% rule with data going all the way back to 1870. Grant talks about the findings of this newer research.

[22.45] Guyton & Klinger's Dynamic Spending in Retirement – Jonathan Guyton and William Klinger published another research paper on this with a somewhat different approach. Grant discusses their dynamic adjustments concept in detail.

[29:20] Poking holes in your theories -  Wade Pfau is another researcher who approached this matter differently. Grant discusses his findings and differences between the other researches.

[32:02] Final thoughts – Grant talks about what you can take away from all these researches and some key points to help you make wise investment decisions.  


Links & Resources:

Bill Bengen’s 4% rule:

Michael Kitces on the 4% rule:

The 4% Rule And The Search For A Safe Withdrawal Rate (Wade Pfau):

Guyton & Klinger's Dynamic Spending in Retirement (Guardrails):