The 4% Rule Gets a Closer Look

The go-to rule for retirement spending was created 28 years ago. Things have changed since then.

Photo of stacks of coins in front of a clock
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(Image credit: Getty Images)

The TV show “Friends” had just debuted, and the year’s hottest song was Ace of Base’s “The Sign” when financial adviser William Bengen created the 4% rule, a general guideline for how much to safely withdraw in retirement. But that was in 1994, and it’s fair to ask whether his formula still holds up.

How the 4% Rule Works 

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David Rodeck
Contributing Writer, Kiplinger's Retirement Report