If you've been anywhere close to a retirement podcast over the last 10-20 years, you've heard of the 4% rule. And like many people, you might have questions about it.

We're going to hear about it directly from the horse's mouth as we talk to Bill Bengen, who first articulated the 4% withdrawal rate as a rule of thumb for withdrawal rates from retirement accounts.

The 4% rule is not a rigid rule but a guideline. Its application requires careful consideration of individual factors, including health, life expectancy, and specific financial circumstances. Bengen encourages retirees to tailor their withdrawal strategies based on their unique situations. Our discussion also explored required minimum distributions (RMDs), which may necessitate higher withdrawals in later years of retirement. However, Bengen suggests that for most people, RMDs would not exceed the calculated withdrawal rates until a very advanced age, making the two compatible.

Core Points:

• The 4% rule, initially a worst-case scenario calculation, suggests a 4% annual withdrawal from retirement savings. This has since been refined
• Research indicates a more generous 4.7% withdrawal rate is now possible due to portfolio diversification and lower investment costs
• Higher withdrawal rates might be feasible (5-5.5%), depending on market valuations and inflation
• Early retirement withdrawal timing significantly impacts long-term success
• Consider individual circumstances, market conditions, and inflation when adjusting withdrawal strategies

Resource:
Bill Bengen's book, "A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More" https://www.bengenfs.com/order-my-book

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Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

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Fritz Gilbert says the adage that "Retirement is a marathon, not a sprint" is backwards. He cites an average age where health starts to decline is 64, so sprinting in those first few years when the average retiree is 61-63 makes sense.

We will dig into that idea, then follow it up with a listener who can't get her husband to think about anything but saving money.

Resource:

• Article by Fritz Gilbert: Retirement is a Sprint, Not a Marathon

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Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

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The fear of running out of money in retirement turns out to be mostly backwards. For super-savers, the data says the opposite usually happens. A piece from Danielle Labotka at Morningstar makes the case that for a lot of retirees: Being too cautious with your spending is actually the bigger risk.

In our listener question segment: Anonymous wants to give money to her kids with warm hands, not cold. How much you can safely give today without putting your own retirement at risk?

And then we'll wrap up with our Retire To Something segment: Dabbling in a little of everything.

Resources:

• Article by Danielle Labotka at Morningstar: Is Your Cautious Retirement Spending Doing More Harm Than Good?
• Book by Bill Perkins: Die With Zero: Getting All You Can from Your Money and Your Life

Connect with Benjamin Brandt:

• Subscribe to the This Week in Retirement: http://thisweekinretirement.com
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Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

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Every year, thousands of retirees pay an extra penalty to the IRS — and almost none of them see it coming.

What catches them off guard isn't a penalty for owing too much. You can do everything right — claim Social Security at the right age, run picture-perfect Roth conversions, manage your withdrawals down to the dollar — and still get a letter from the IRS charging you extra.

I reworked a framework from an article by Sheryl Rowling at Morningstar into four clean, completely legal ways to avoid getting tax penalties.

After that, we've got a listener question: A retiree writes in and says, "I don't want to think about money. My plan is tested, I have enough — so what's a simple checklist I can use to stay on track?"

And to close the show, our Retire To Something segment where Clif traded his to-do list for a garden plot — and found community, leadership, and a whole lot of homegrown vegetables in the process.

Resource:
Article by Sheryl Rowling at Morningstar: 5 Ways to Avoid Tax Penalties

Connect with Benjamin Brandt:

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Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

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Americans don't feel great about the economy. Consumer Sentiment just hit the lowest reading in roughly 75 years.

Ben Carlson over at A Wealth of Common Sense dug into why that might be, and what it means for those of us trying to enjoy a retirement when it always feels like the second shoe is about to drop.

In our Listener Question segment, we hear from someone who is sitting on 50x their annual spending - and they can't get their spouse to spend it.

Wrapping up the episode we hear from Karen in our "Retire To Something" segment. She's thru-hiking thousands of miles and loving it.

Resource:

• Article by Ben Carlson of A Wealth of Common Sense: The Lowest Consumer Sentiment EVER

Connect with Benjamin Brandt:

• Subscribe to the This Week in Retirement: http://thisweekinretirement.com
• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com
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Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

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There's a decision your surviving spouse is going to make about your IRA, after you're already gone, that can either cut short or stretch out how long your kids get to keep that money growing — and most people don't even realize the choice is being made. We're going to zero in on one option in particular, one that sounds a little crazy on its face: turning down an inheritance on purpose.

In our Listener Question segment: A listener wrote in about a family farm, a couple of brothers he'd rather not be in business with, and whether saying "no thank you" to his own share is the way to keep the peace in the family.

And then to close things out, we'll head over to our Retire To Something segment where Shawn figured out how to check just about every box that matters.

Resource:
Article by Denise Appleby at Morningstar: The IRA Decision That Affects Your Kids

Connect with Benjamin Brandt:

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Get the book!
Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

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You've heard it said a hundred times: Spend the money, make the memories, don't die with regret.

However, for certain kinds of retirees, dying as the richest person in the graveyard isn't a tragedy at all. The comfort of simply having the money can be worth more than anything you'd ever buy with it.

Today, we begin with an article, The Many Utilities of Retirement, which talks about RPIG (the Richest Person In the Graveyard) versus FORO (the Fear of Running Out of money).

It's an interesting look at the juxtaposition.

After that, a question - listener that calls himself the millionaire next door — he'll never spend what he's saved, it's all headed to the kids and grandkids, and yet he still mows his own lawn and changes his own oil. He wants to loosen up and spend a little more… but he also kind of loves the life he's already got. So what do you tell a guy like that? I'll give you my take.

And we wrap up the show with our Retire To Something segment.

Resource:

• Article by William Bernstein and Edward McQuarrie: The Many Utilities of Retirement

Connect with Benjamin Brandt:

• Subscribe to the This Week in Retirement: http://thisweekinretirement.com
• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com
• Work with Benjamin: https://retirementstartstoday.com/start

Get the book!
Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

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If you want to spend more at the beginning of retirement, which withdrawal strategies actually let you do that? This week's Retirement Headline from Amy C. Arnott called "The Best Strategies for Boosting Starting Withdrawal Rates in Retirement" answers that question.

For our Listener Question: A listener wrote in wondering whether sequence-of-returns risk really fades away after the first decade of retirement, and if so — whether that means it's safe to bump withdrawals up to 5.5% or more later in the game.

And we wrap it up with another Retire To Something segment.

Resource:

Article by Amy C. Arnott
 at Morningstar: The Best Strategies for Boosting Starting Withdrawal Rates in Retirement

Connect with Benjamin Brandt:

• Subscribe to the This Week in Retirement: http://thisweekinretirement.com
• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com
• Work with Benjamin: https://retirementstartstoday.com/start

Get the book!
Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

Follow Retirement Starts Today in:
Apple Podcasts, Spotify, Overcast, Pocket Casts, Amazon Music, or iHeart