John Montgomery Urges 2.8% Retirement Withdrawals as Bill Bengen Backs 4.7%
Updated
Updated · Business Insider · Aug 21
John Montgomery Urges 2.8% Retirement Withdrawals as Bill Bengen Backs 4.7%
1 articles · Updated · Business Insider · Aug 21
Summary
John Montgomery said retirees should withdraw 2.8% of portfolio value measured from the last major market peak, sharply below Bill Bengen’s updated 4.7% guideline.
A 90/10 stock-bond mix underpins that rule: Montgomery argues it can deliver 6.5% real returns versus 4.8% for a 60/40 portfolio, but needs a lower spending rate to absorb higher volatility.
The framework is designed to hold spending steady for five years without cuts unless stocks fall more than 30%, while allowing retirees to ratchet spending higher when markets reach new peaks.
Montgomery said the approach aims to avoid running out of money and still grow the portfolio over a long retirement, rejecting Bengen’s view that retirees often underspend out of excessive fear.
The split reflects a broader retirement debate between maximizing lifetime spending and preserving assets for longevity risk, heirs or charitable giving.
Could a shocking 90 percent stock portfolio and a tiny 2.8 percent withdrawal rate actually be the ultimate secret to a bulletproof retirement?
As Morningstar slashes its 2026 safe withdrawal rate, will blindly following traditional retirement math leave you broke or needlessly hoarding your wealth?