The Inventor of the 4% Withdrawal Rule has Updated His Recommendation. It is Significantly Less than Guaranteed Lifetime Income Benefits.

Jun 3, 2025

Bill Bengan published a study in the Journal of Financial Planning in 1994 that introduced the 4% withdrawal rule. His study recommended initially withdrawing 4% from your portfolio to ensure you will not run out of money in retirement. 

 

The financial industry ran with this recommendation ever since. 

 

JP Morgan projects the following on a typical portfolio:

 Withdrawal Rate       Likelihood of not running out of Money

    3%                            95 - 100%

    4%                            85 - 90%

    5%                            65 - 70%

    6%                            40 - 45% 

If you increase your withdrawal rate, your likelihood of success decreases significantly.

 

Current Guaranteed Lifetime Income withdrawal rates:

   - Age 65: 7.5% guaranteed for life

   - Age 75: 8.5% guaranteed for life

   - Rates increase if you are older

 

You can increase your income significantly with 100% likelihood of success. You cannot outlive your income.

 

 

This is the "Golden Era" of fixed assets. The best rates in 40+ years! Insured with guarantees.

 

   - Your Personal Bank policies are insured, with guarantees, income tax-free, highly liquid, and likely to increase returns for the next 5-10 years due to higher bond yields.

 

   - Fixed Index Annuities have the best upside potential in 40+ years with no downside market risk. The principle is guaranteed. Some offer signing bonuses up to 16% with strong upside potential.

 

   - Guaranteed Lifetime Income is the highest in 40+ years. Some products offer up to 30% signing bonus. Other products offer up to 10% increased guaranteed lifetime income each year you defer.