BacktestFolio · Glossary
Bengen / 4% rule
In plain language
Bengen tested, period by period, how much you could withdraw without running out of money too soon. On the sample he used, a 4% initial withdrawal raised with inflation lasted at least about thirty years. Trinity (1998) later popularised success rates on the same topic, with different bond assumptions.
Technical definition
1994 article by William P. Bengen (Journal of Financial Planning) which, on historical US data, identified a 4% initial withdrawal adjusted for inflation as a level that, in the periods analysed, did not exhaust the portfolio before roughly 30 years. It is the origin of the '4% rule'; the term SAFEMAX came later and denotes the highest initial withdrawal that also survived the worst historical scenario.