Father of 4% Rule Urges Caution, Cash as Market Risk Rises

May 17, 2022 by Jane Wollman Rusoff

Bill Bengen, the inventor of the so-called 4% retirement portfolio withdrawal rule, has a crucial message for financial advisors:

“Manage the risk portion of a retirement nest egg actively. Unless you’re willing to vary — reduce — your clients’ allocations to reduce risk, it could be damaging,” the former 25-year advisor argues in an interview with ThinkAdvisor.

But have the pandemic, falling markets and rising inflation torn up the 4% rule? Hardly, he says.

“We’re in a period of rising interest rates, and probably both stocks and bonds will do poorly,” he says. 

This time, the Federal Reserve “may not have the luxury” to use monetary policy to affect “a quick cure,” Bengen cautions.

Click HERE to read the full story via ThinkAdvisor

Originally Posted at ThinkAdvisor on May 9, 2022 by Jane Wollman Rusoff.