Retirement income: Why the '4% rule' does not work for the UK

Does the 4% rule have a place in UK retirement planning?

clock • 3 min read

Doug Brodie explained why, in his view, the 4% rule is inappropriate for the UK market...

In October 1994 Bill Bengen published his paper summarising a number of empirical simulations of historical market behaviour to attempt to identify a percentage of a pension that could be drawn down each year as income without fear of the money running out. It was later branded the ‘Safemax Rate' and was set at 4% per annum. Bill is a smart cookie – his undergrad degree was in aeronautics and astronautics from MIT in Boston and he co-authored Topics in Advanced Model Rocketry. (Ergo, without exaggeration he's a rocket scientist).  When he was 40 he moved to southern California and set up...

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