Does William Bengen’s 4% rule still apply today?

7 July 2026

For three decades, William Bengen’s 4% rule has shaped how advisers and retirees think about sustainable withdrawals. Originally published in 1994, the rule suggested that a retiree could withdraw 4% of their portfolio in the first year (gross of fees), increase that amount with inflation, and reasonably expect their funds to last 30 years. But does that guidance still hold in 2026? Recent research and Bengen himself suggest it may no longer be the optimal starting point.

Article last updated 8 July 2026.

The original purpose of the 4% rule

Bengen created the rule after analysing historic market returns to identify a “safe” withdrawal rate that could withstand even the worst 30 year retirement periods. His first publication found a safemax of 4.15%, later rounded to 4% for simplicity. It is worth noting that he used a diversified 50/50 US stock bond portfolio.

The rule was never meant to be a rigid formula, it was a guideline, designed to give retirees a degree of certainty at a time when such thinking was new.

Why the 4% rule is being re-evaluated

Market conditions have changed

Market yields, bond rates and volatility patterns are different today compared with the periods used in Bengen’s early research which looked at data from around 1926-1976. Lower bond yields, and higher volatility have increased the pressure on portfolios using fixed withdrawal strategies. This has led some researchers to recommend a 60/40 portfolio with withdrawal rates closer to 3.7%.

Inflation is more damaging than ever

Bengen now calls inflation the greatest enemy of retirees, because rising prices demand higher withdrawals to maintain living standards. The original rule was born in a period of low and stable inflation. Today’s inflation dynamics challenge that stability.

Longevity continues to rise

Life expectancy has increased since Bengen published his research. Potentially longer retirement horizons make fixed real withdrawal strategies more fragile and require more adaptive approaches.

What Bengen now says

Bengen has repeatedly updated his view of a “safe” withdrawal rate as markets and data have evolved. His more recent work incorporates:
• broader asset class diversification
• rising equity glide paths
• rebalancing benefits
• updated market data over many more decades

His new “universal safemax,” based on expanded datasets and added asset classes, is 4.7%. Other interviews and research indicate he now sees 5.25%–5.5% (gross of fees) as a potentially safe starting rate in today’s environment, particularly with moderate inflation. A 2025 interview with retirement researchers Wade Pfau and Alex Murguia also highlighted Bengen’s view that a withdrawal rate of around 5.5% may be viable under certain conditions. In short: Bengen does not believe the 4% rule is fixed and he never did.

The rise of dynamic withdrawal strategies

Across the industry, planners increasingly favour dynamic frameworks over fixed rules, including the Guardrails approach in which you withdraw more in strong years and cut back in weaker ones to preserve longevity.

When the 4% rule may still work

Despite evolving research, the 4% rule remains useful as a quick heuristic, especially for:
•    clients with conservative spending patterns
•    retirees with other secure income sources (DB pensions, annuities, rental income)
•    clients who are flexible and reduce spending after poor market years

In these cases, 4% is often safe, and sometimes unnecessarily cautious.

The bottom line: The 4% rule isn’t dead but it’s no longer definitive

Today’s research overwhelmingly supports the idea that retirement income must be personalised, not standardised.

Does the 4% rule still apply? Yes as a baseline starting point. No if used rigidly or without considering market conditions, inflation, longevity and client flexibility. The evolution of Bengen’s own research tells the story: the original 4% was simply the first chapter in a much broader, more nuanced understanding of sustainable retirement income.

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