Ben Felix And The 2.7% Safe Withdrawal Rate

A recent study claimed that the 4% rule was based on biased data. Specifically, it was flawed because it relied on U.S. returns data and inflation, and assumed a 30-year retirement. Based on life expectancy data from the Social Security Administration and returns and inflation data dating back to 1890 from 38 developed countries, the study concluded that a "safe" withdrawal rate assuming a 1% chance of failure was just 0.80%.

Recently, Ben Felix produced a video on this study that many have asked me about. In this video, I cover what I think are some fundamental flaws in the study, at least if one tries to apply it to a real-life retirement. More importantly, I discuss safe withdrawal rates in general and how one much use them in an uncertain world.

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Video Resources
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Ben Felix 2.7% Video: https://www.youtube.com/watch?v=1FwgCRIS0Wg&ab_channel=BenFelix
Safe Withdrawal Rate Study: https://deliverypdf.ssrn.com/delivery.php?ID=497104031021109092086098020122096004003044057035002028109095097094001114081101106007024026006007024061114116071126022064022019049061090039081011104112090079122124025019016096109085087098113099089116002098091126007095025071027067120007072101116075127&EXT=pdf&INDEX=TRUE
Wade Pfau research: https://retirementresearcher.com/4-rule-work-around-world/
Guyton-Klinger paper: https://www.financialplanningassociation.org/sites/default/files/2021-11/2006%20-%20Guyton%20and%20Klinger%20-%20Decision%20Rules%20and%20SWR%20%281%29.PDF

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#retirement #safewithdrawalrate #robberger

ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (https://amzn.to/3by10EE)

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