I’ve been wanting to do this analysis for years. Apparently, G-K is quite popular with financial Advisors. Jonathan Guyton, a friend and colleague, helped me understand the intricacies of G-K. Despite his valued assistance, it took me almost two months to develop a process flow chart and prep my Excel spreadsheets to do the analysis. That’s why you haven’t heard from me in a while!

I confess I made one small change to G-K methods. G-K does not permit negative adjustments to withdrawals during bouts of deflation, except after the first year. I employed deflationary adjustments whenever they were called for. Had I not done this, the “worst-case” scenario, currently the 10/1/1968 retiree, would have migrated to a depression-era retiree. Thus, I refer to my study as “modified G-K”, to be fair.

Figure 2.30 depicts how the individual SAFEMAX varied with each of 361 retirement dates. The average SAFEMAX is 9.6%, which is far higher than anything I have encountered with a conventional COLA scheme. Also, there is far less variation in this amount from retiree to retiree than in pure COLA schemes I have studied. G-K does a superb job of producing high initial withdrawal rates which are amazingly consistent across all market environments.

Figure 2.30A presents another view of the G-K scheme. It presents the Cumulative Real Withdrawals (CRW), or the sum of the real value of all withdrawals made during the entire 35-year planning horizon, for both G-K and a conventional COLA scheme. As you can see, G-K does not fare quite as well here. In fact, for all 361 retirees save one, the conventional COLA scheme generates superior CRW, frequently by a large amount.

I have a more detailed analysis of G-K on my website, www.bengenfs.com. It also includes recommendations on its use. Please visit soon!

My website now has 22 retirement scenarios posted. Does one fit your needs?

Yours for a richer retirement,

“Bill” William Bengen

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Abishek Gadre of the Money Matters MD podcast recently interviewed me on his podcast about the 4% Rule and related topics. If you'd like to listen in on our conversation, follow this link:

Yours for a Richer Retirement,

Bill Bengen
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Casey B. Weade, of Howard Bailey Financial, recently interviewed me on his podcast about the 4% Rule and related topics. If you'd like to listen in on our conversation, follow this link:

https://lnkd.in/gTEAhNGU

Yours for a Richer Retirement,

Bill Bengen

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(Retirement Scenario 2.22) to my website, bengenfs.com. It's based on the Fixed Percentage (FP) withdrawal scheme, which specifies annual withdrawals computed from a fixed percentage of the year-beginning portfolio value. This is a popular scheme because a non-zero balance always remains in the portfolio unless the withdrawal rate is very high. Thus, one never runs out of money.

This is a companion to Scenario 2.21, which has an identical set of Elements, except that 2.21 featured a 35-year planning horizon (vs 30 years for 2.22) and used an FP of 4.5%, while 2.29 uses 5.75%.

How did I select that 5.75% withdrawal rate? Please examine Figure 2.22A. To create it, I computed the average cumulative withdrawals for each of 361 retirees over a 30-year period, at thirteen different FP withdrawal rates. As you can see, the chart peaks at a withdrawal rate of 5.75%. However, all the other withdrawal rates could have been acceptable choices: there is little difference between them. The FP withdrawal scheme is truly weird!

Figure 2.22B depicts how the average cumulative withdrawals (ACW) varied with each of 361 retirement dates. The average ACW is $343,000. Clearly, there is much variation in this amount from retiree to retiree. Some enjoyed more than twice that amount.

This is a great scheme for extending the life of your portfolio, but it comes with the disadvantage that during major bear markets, your portfolio income could take a substantial hit for several years. This scheme appears to work best near the end of a bear market, or at the beginning of a bull. That's not today's menu, unfortunately.

I mentioned in my last post that I'd be studying the Guyton-Klinger withdrawal scheme. I've been in touch with Jonathan, an old friend, as I wanted to get from the horse's mouth the ground rules for this scheme. Jonathan has been very helpful.

My website now has 21 retirement scenarios posted. Does one fit your needs?

Yours for a richer retirement,

"Bill" William Bengen

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https://the-long-view.simplecast.com/episodes/bill-bengen-inflation-is-the-greatest-enemy-of-retirees

Yours for a Richer Retirement,

Bill William Bengen

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My website now has 17 retirement scenarios posted. Does one fit your needs?

Yours for a richer retirement,

“Bill” William Bengen

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Tomorrow I’ll post a new retirement scenario (Retirement Scenario 2.27) to my website, bengenfs.com. It features the highest stock allocation I have tested so far, 95%. The remaning 5% of the portfolio is held in US Treasury bills, to fund withdrawals.

The results of this scenario are truly exotic, particularly when compared to similar Scenario 2.20, which contained only 65% stocks (see figure 2.27B). The results are expressed as a % increase in SAFEMAX for Scenario 2.27 relative to Scenario 2.20. For example, a reading of +5% for a particular retiree indicates that the SAFEMAX for Scenario 2.27 is 5% higher than the SAFEMAX for Scenario 2.20. The eight Elements for these two scenarios are identical, save that Scenario 2.20 features an allocation of 65% stocks, 30% US intermediate-term government bonds, and 5% cash. That is essentially a comparison of SAFEMAX between 65% and 95% stocks.

The swings in SAFEMAX values between the two scenarios are very wide. The best relative performance for Scenario 2.27 occurred with the 4/1/1942 retiree, whose SAFEMAX exceeded that of Scenario 2.20 by about +31.6%. The worst relative performance occurred for the 7/1/1929 retiree, when the SAFEMAX for Scenario 2.27 trailed that of Scenario 2.20 by approximately -35.4%.

On average, across all 361 retirees in this study, SAFEMAX values for Scenario 2.27 are more than 12% higher than the corresponding SAFEMAX values for Scenario 2.20. That is a tribute to the power of ultra-high equity allocations. However, as noted above, there were wide disparities between individual retirees. For 9% of retirees, Scenario 2.27 underperformed Scenario 2.20 by an average of -11.4%. For the remaining 91% of retirees, for whom Scenario 2.27 outperformed or matched Scenario 2.20, the average SAFEMAX gain was +14.5%. Clearly, this scenario is not for the faint-hearted. Opportunities for large outperformance and underperformance abound, though the balance is tilted toward outperformance.

All of the underperformance of Scenario 2.27 occurred during and just preceding major bear markets: 1926-1930, 1968-1970, 1987, and 2000. All of its outperformance concomitantly occurred during or just preceding bull markets. Clearly, this is a fine strategy to use if you are confident you are in or near a bull market. For those who wish to use it under all circumstances, risk management techniques are recommended.

My website now has 17 retirement scenarios posted. Does one fit your needs?

Yours for a richer retirement,

“Bill” William Bengen

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(Retirement Scenario 2.26) to my website, bengenfs.com. This is a companion to Scenario 2.20, which has an identical set of Elements, except that 2.20 had no legacy, and 2.26 features a nominal legacy equal to 20% of the starting portfolio value.

With respect to SAFEMAX, there is very little visible difference between these two scenarios, as per Figure 2.26A. The legacy is too small to make a significant difference.

The chart below depicts how the Individual SAFEMAX varied with each of 361 retirement dates ( I have a new year of data, 2025, which adds four retirees to the count.) The average SAFEMAX over the 100-year period is 7.1%.

My website now has 16 retirement scenarios posted. Does one fit your needs?

Yours for a richer retirement,

“Bill” William Bengen

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(Retirement Scenario 2.25) to my website, bengenfs.com. The eight Elements are virtually identical to those of Scenario 2.24, with the exception that this scenario has a zero legacy (account balance at the end of the planning horizon), while Scenario 2.24 had a non-zero legacy.

Figure 2.25 below depicts how the Individual SAFEMAX varied across 357 retirement dates. The average SAFEMAX over the 100-year period is 7.5%.

Figure 2.25A compares the SAFEMAX values for each retirement date for Scenarios 2.24 and 2.25. On average, the difference between the two is only about 2%. The non-zero legacy is too small to make a huge difference, although it clearly increases SAFEMAX across the board.

Yours for a richer retirement,

"Bill" William Bengen

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Naturally, as mentioned in my book "A Richer Retirement", providing a legacy for heirs reduces SAFEMAX. This effect can be very dramatic, especially for large legacies.

Scenario 2.24 incorporates a legacy of only 20% of the portfolio's starting value. Even with such a small legacy, the reduction in SAFEMAX is significant.

The chart below depicts how the Individual SAFEMAX varied with each of 357 retirement dates. The average SAFEMAX over the 100-year period is 7.4%. Note how SAFEMAX "bottoms out" just before major stock bear markets (e.g., 1/1/1929, 4/1/2000, and 1/1/2007) and peaks just before the start of a new bull market. This suggests that retiring in the middle of a major bear market may be a winner, as SAFEMAX is rising. As Warren Buffett has said, "If you wait to see the first robin, you'll miss the spring."

Yours for a richer retirement,

"Bill" William Bengen

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I corrected this by refining the regression curves I use to construct the tables. There is now no overlap in SAFEMAX values for the three inflation regimes.

If you plan to use this scenario, please check out the revisions on my website.

Yours for a richer retirement,

Bill Bengen

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Amazon.com is running a promotion of the Kindle version of my book, "A Richer Retirement- Supercharging the 4% Rule to Spend More and Enjoy More." For a limited time, you can buy it for just $2.99!

Here is a link to the book on the Amazon.com site:

https://www.amazon.com/Richer-Retirement-Supercharging-Spend-Enjoy/dp/1394343175/ref=sr_1_1?crid=3MW4OPR8TOX15&dib=eyJ2IjoiMSJ9.QhyvQdnl-BZrS075ncRdVygq3BydicfhtwyUP9oXW9GYvNxUrY182myJudri1ivCvNg81orU2W_jud2kjRkKpYUPT1nMpueoBEfowxieF2v6kp0ANh53mZMHrhppxP3sh3lybhj0oW8BQKMcfRRrAT2ZLax2PUatc22uxWpoYNZA1fsLMdi0qpL7OpiUnzhtiw-XjEkuHwhB68lPSCfVpncL6SJsb31w0wrg9MiT9Zs.4_9yI6Bwq5aZB7wGFaCtLbwsQgoKh6DSrwXQGabtzlc&dib_tag=se&keywords=a+richer+retirement&qid=1747677660&sprefix=%2Caps%2C144&sr=8-1

Get your copy now!

Yours for a Richer Retirement,

Bill Bengen

Jacek Lampert of the ETFatlas podcast recently interviewed me about the 4% Rule and related topics. If you’d like to watch our conversation, please follow this link:

https://academy.etfatlas.com/is-the-4-rule-dead-william-bengen-updates-his-legendary-strategy/​

Yours for a Richer Retirement,

Bill Bengen

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Tom Dickson of the Financial Experts Network interviewed me about the 4% Rule and related topics. If you’re interested in listening in on our conversation, please visit the following link:

https://lnkd.in/gNnxFFUb

Included in this broadcast is a detailed PowerPoint presentation I created to explain my research.

Yours for a Richer Retirement,

Bill Bengen

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“Revisiting the Fixed Percentage (FP) Withdrawal Scheme”). It explores the advantages and disadvantages of using this withdrawal scheme, which is a viable alternative to the COLA scheme I frequently write about.

Yours for a Richer Retirement,

Bill Bengen

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