Bill Bengen Backs 65/30/5 Retirement Portfolio as 4.7% Withdrawal Rate Guides 30-Year Plans
Updated
Updated · Business Insider · Aug 19
Bill Bengen Backs 65/30/5 Retirement Portfolio as 4.7% Withdrawal Rate Guides 30-Year Plans
3 articles · Updated · Business Insider · Aug 19
Summary
Bengen said investors nearing retirement should settle on a 65% stock, 30% fixed-income and 5% cash portfolio, while younger investors more than five years out can stay 100% in stocks.
For spending, he pegged a safe withdrawal rate at 4.7% for portfolios meant to last 30 to 35 years, dropping to 4.1% for horizons of 60 to 70 years.
Within stocks, he favors equal exposure to five segments—large-cap, mid-cap, small-cap, micro-cap and international shares—alongside intermediate-term bonds that include TIPS and a cash reserve.
Rebalancing is central to the strategy: retirees should trim outperforming holdings such as small caps or international stocks, refill cash for living expenses, and direct dividends and bond income into that cash bucket.
Bengen said the mix stays closer to a classic 60/40 model than more aggressive stock-heavy retirement advice, aiming to limit damage from severe bear markets like 2008 or 1929.