Bill Bengen Updates the 4% Rule: The New 4.7% Safe Withdrawal Rate for Retirement

For decades many advisors and investors relied on Bill Bengen’s original analysis that recommended a 4% safe withdrawal for a 30-year retirement. By updating his analysis and changing key assumptions, his new recommendation could mean a richer lifestyle and greater peace of mind throughout retirement.

On September 18^th, Bill will join me live via Zoom during Session 2 of our upcoming in-person workshop series to walk you through his new research, the assumptions behind the 4.7%** rule, and what it could mean for your retirement. (See invitation inside.)

If you are in the greater Pittsburgh area, please join us. Not only will hear directly from the originator of the 4% rule, but we are hoping to be able to accept some questions from the audience. If you plan to attend, please feel free to email your specific questions for Bill to Requests@PayTaxesLater.com.

A Refresher: How the Safe Withdrawal Rule Works

In 1994, Bill Bengen set out to answer one of the most important retirement questions: How much can you spend each year without running out of money? The classic Bill Bengen “safe withdrawal rate” is the percentage of your retirement savings you can withdraw each year―adjusted annually for inflation―without running out of money over a 30-year retirement.

His groundbreaking research revealed that a retiree could:

Withdraw 4% of their portfolio’s value in the first year of retirement.
Increase that dollar amount each year to keep pace with inflation.
Maintain that level of spending through bull and bear markets alike, and in every historical scenario, the money lasted for at least 30 years.

The key is that your withdrawal is based on your original portfolio value, not on year-to-year market moves. You don’t cut spending when markets fall or splurge when they rise, you stick to the plan and rebalance your portfolio as needed.

What Could You Do with that Extra Distribution Each Year?

Spend more on your own health care and quality of life.
Sponsor a multi-generational family vacation (a great way to spend your money that I’ve advocated for years).
Provide increased financial support for your adult children.
Support your grandchildren’s education more generously, whether for K–12, college, or advanced studies.
Or simply keep it invested and enjoy the peace of mind that comes with enhanced financial security.

But, equally important, the workshops will also cover additional strategic planning moves that you can use to further increase your sustainable spending during retirement including:

Tax-savvy Roth IRA, 401(k), & 403(b) conversion strategies.
Coordinating Social Security timing with Roth Conversions.
How you could potentially use a portion of the equity of your home as part of your safe withdrawal rate strategy.
Evaluating whether partially annuitizing Traditional TIAA and other retirement assets makes sense.
The best estate plan for married couples.

What’s Changed and Why It Matters Now

Published just a few weeks ago, Bill’s book, A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More (Wiley, 2025), explains the details behind this significant increase. As a thank you, each attendee will receive a hardcover copy of Bill’s new book.
We hope to see you on Thursday, September 18^th at Courtyard by Marriott Pittsburgh University Center, 100 Lytton Avenue, Pittsburgh, PA 15213. Even if you can’t make it, I encourage you to read the invitation because just reading the invitation will provide valuable information.

If You Retired Tomorrow,

How Much Could You Afford to Spend?

In Jim Lange’s new workshop, faculty and administrators can learn directly from Bill Bengen (the originator of the 4% safe withdrawal rate) regarding why he increased the rate to 4.7%**.

That .7% equates to a potential 17.5%* increase in safe portfolio withdrawals.

Thursday, September 18, 2025

Courtyard by Marriott Pittsburgh University Center (Schenley I – III)

100 Lytton Avenue, Pittsburgh, PA 15213

Primary Presenter: James Lange, CPA/Attorney

Priority registration for Jim’s existing clients, university faculty and administrators, and then open to the public.

Seating is limited. With Bill presenting such critical information, these workshops will likely fill quickly. Do yourself a favor and register today. Below are two easy ways to reserve your seats:

If you are married, both spouses are encouraged to attend. Complimentary refreshments will be served.

During Session Two of our workshop, faculty and administrators will learn directly from Bill Bengen, the most quoted safe-withdrawal expert in the world regarding why and how they can spend more during retirement.

Most advisors quote Bill’s 4% number when prospective retirees ask, “How much will I be able to spend annually if I retire now?” Bill just updated his recommendation of 4% to 4.7%** which equates to a 17.5%* increase in safe portfolio withdrawal. (Please see below.)

The classic Bill Bengen “safe withdrawal rate” is the percentage of your retirement savings you can withdraw each year—adjusted annually for inflation—without running out of money over a 30-year retirement. Under Bengen’s original research, a retiree with $1 million could withdraw 4% ($40,000) in the first year. His updated research suggests 4.7% ($47,000) in the first year—if you follow his specific portfolio and assumptions**.

Each year thereafter, you increase the prior year’s dollar withdrawal by the rate of inflation, regardless of whether the market goes up or down.

** Bill’s Assumptions for 4.7% Safe Spending Rate

*How We Arrived at the 17.5% Raise from 4% to 4.7%

Defined withdrawal plan.
Defined planning horizon, usually 30 years.
Use of retirement accounts for withdrawals.
$0 dollars are left at the end of life (planning horizon).
Well-diversified portfolio of seven different asset classes with 55% stock, 40% bond and 5% cash.
Periodic rebalancing of portfolio.
Acceptance of market returns vs. beating the market.
Periodic withdrawals throughout the year.
High inflation.
High market valuation.

Assume a $1 million portfolio.

$1,000,000 x 4% =$40,000;

$1,000,000 x 4.7% = $47,000;

$47,000 (new number) ― $40,000 (the old number) = $7,000;

The difference of:

$7,000 divided by $40,000 (old number) = 17.5%,

the amount of the raise in retirement income.

Special Alert!

Session Two Offers a Rare Opportunity to Hear Bill Bengen Live from Arizona via a Zoom Interview with Jim and a Live Audience in Pittsburgh!

Jim has developed his own questions for Bill but if you plan to attend, please feel free to email your specific questions for Bill to Requests@PayTaxesLater.com.

We are highlighting Session Two because it features Jim’s interview with Bill Bengen. Session One and Session Three are described below.

Session Two: 1:00 – 3:00 PM

If You Retired Tomorrow,

How Much Could You Afford to Spend?

James Lange, CPA/Attorney, and special guest, Bill Bengen, will help near-retirees and retirees determine how much they can safely spend each year without outliving their nest egg. There is no topic more critical for your retirement security. This is an unprecedented opportunity to hear directly from Bill. Learn the reasoning behind his revision of the 4% rule to the 4.7% rule which results in a 17.5% increase in post-retirement spending. (Please see boxed information.)

During the interview session, Jim and Bill will address:

What exactly is the “safe withdrawal rate?”
How the 4% rule―now the 7% rule―works.
The asset allocation that underpins the 4.7% rule.
Why did Bill change his thinking and write his new book?
How taxes affect your safe withdrawal rate, particularly for academics with large balances in tax-deferred retirement plans.
Whether annuitizing part or all your Traditional TIAA could increase your safe withdrawal rate, along with other custom strategies for those with TIAA and 403(b)s.
The 4.7% rule assumes a 30-year retirement horizon. Bill will explain how the rule changes if you and your surviving spouse think one of you will live longer than 30 years or if you both expect to live less than 30 years.
How inflation affects safe withdrawal rate calculations.
And the elephant in the room: Should I worry about the economy going to hell under Trump and reduce my safe withdrawal rate?

Jim Lange will address:

One of Life’s Greatest Mysteries: What’s the best way to get your money out of Traditional TIAA? The answer can affect your safe withdrawal rate. The best option for most professors will likely come as a shock because most advisors recommend the exact opposite. We will show compelling proof of our recommendations.
Should you annuitize part or all your Traditional TIAA?
How the built-in annuitization “bonus” provisions, available in certain Traditional TIAA contracts, could meaningfully boost your income in retirement.
Can you spend more if you have a paid-off house, and if so, how much?
Which money to spend first: Learn the ideal withdrawal sequence from taxable accounts, Roth IRAs, traditional IRAs, and employer retirement plans.

Bill’s new book, A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More (Wiley, 2025), has just been published. Each workshop attendee will receive a hardcover copy of Bill’s new book and a hardcover copy of Jim’s 472-page book, Retire Secure for Professors and TIAA Participants (2023).

Session One: 10:00 AM - Noon

Roth Conversions After the OBBB: New Opportunities and New Pitfalls. How to Make the Most of 2025’s Tax Landscape

Led by James Lange, CPA/Attorney with Guests: Jen Hall, CMA, CPA, CFP, CRPC and Dominic Bonaccorsi, CPA, CRPC

The One Big Beautiful Bill (OBBB) Act, signed into law on July 4, 2025, permanently extends the federal income tax reductions set by the 2017 Tax Cuts and Jobs Act (TCJA), which were previously scheduled to sunset at the end of this year. Get the most up-to-date guidance on adjusting your conversion strategy for maximum tax efficiency under the new rules.

In this session, Jim Lange will cover classic principles of Roth IRA conversions (with additional support from two “number-crunching” CPAs who work with Jim), plus seldom used and little-known advanced Roth conversion techniques.

In this session you'll discover:

Key tax provisions of the OBBB that affect Roth conversions, retirement withdrawals, charitable giving, and estate planning.
Classic peer-reviewed concepts.
Proactive multi-year tax planning: How to develop the ideal long-term Roth IRA conversion plan for today’s tax policy environment.
Optimal timing for Roth conversions: The peer-reviewed math behind the best timing strategies.

Advanced Strategies:

Tax-free conversions: How to convert after-tax dollars in IRAs, TIAA and other retirement plans to Roths at no cost.
Shift a portion of your taxable investments—such as 403(b)s, IRAs, and other retirement plans—into the tax-free accounts of Roth IRAs, Roth 401(k)s, and 529 plans for your children and other family members. Note: This strategy could, in some cases, be more beneficial to your heirs than making Roth IRA conversions in your own accounts.

Session Three: 3:15 – 5:00 PM

The Best Estate Plan for Married University Faculty and Administrators

In this session, you’ll learn:

The details of the best (and most flexible) estate plan for most married professors.
Lifetime gifting strategies: How increasing lifetime gifts to your heirs now can reduce future tax burdens and provide financial assistance when it's most impactful for your loved ones.
Who Gets What? A rarely discussed strategy that evaluates the tax consequences of leaving differing types of assets to different beneficiaries in different income tax brackets. We will cover a similar strategy for charitable giving.
Risk and reward of delaying Social Security benefits: Are the risks of benefit cuts and dying young sufficient for the primary wage earner to take Social Security before age 70? Or should you delay taking your Social Security benefits to significantly increase your lifetime payouts as well as those of your surviving spouse?

Attend Jim Lange’s Workshops for FREE this September. Reserve Your Seats Today!

Thursday, September 18, 2025

Courtyard by Marriott Pittsburgh University Center (Schenley I – III) 100 Lytton Avenue, Pittsburgh, PA 15213

Session Two features special guest, Bill Bengen, originator of the 4% safe withdrawal rate.

James Lange Bonus Gifts Bill Bengen Book

Disclaimer: Lange Accounting Group, LLC offers guidance on retirement plan distribution strategies, tax reduction, Roth IRA conversions, saving and spending strategies, optimized Social Security strategies, and gifting plans. Although we bring our knowledge and expertise in estate planning to our recommendations, all recommendations are offered in our capacity as CPAs. We will, however, potentially make recommendations that clients could have a licensed estate attorney implement.

Asset location, asset allocation, and low-cost enhanced index funds are provided by the investment firms with whom Lange Financial Group, LLC is affiliated. This would be offered in our role as an investment advisor representative and not as an attorney.

Lange Financial Group, LLC, is a registered investment advisory firm registered with the Commonwealth of Pennsylvania Department of Banking, Harrisburg, PA. In addition, the firm is registered as a registered investment advisory firm in the states of AZ, FL, NY, OH, and VA. Lange Financial Group, LLC may not provide investment advisory services to any residents of states in which the firm does not maintain an investment advisory registration. Past performance is no guarantee of future results. All investing involves risk, including the potential for loss of principal. There is no guarantee that any strategy will be successful. Indexes are not available for direct investment. If you qualify for a free consultation with Jim and attend a meeting, there are two services he and his firms have the potential to offer you. Lange Accounting Group, LLC could offer a one-time fee-for-service Financial Masterplan. Under the auspices of Lange Financial Group, LLC, you could potentially enter into an assets-under-management arrangement with one of Lange’s joint venture partners.

Please note that if you engage Lange Accounting Group, LLC and/or Lange Financial Group, LLC for either our Financial Masterplan service or our assets-under-management arrangement, there is no attorney/client relationship in this advisory context.

Although Jim will bring his knowledge and expertise in estate planning to this workshop and to the meetings, it will be conducted in his capacity as a financial planning professional and not as an attorney. This is not a solicitation for legal services.