John Montgomery Urges 2.8% Retirement Withdrawals With 90% Stocks as Bengen Backs 4.7%
Updated
Updated · Benzinga · Aug 21
John Montgomery Urges 2.8% Retirement Withdrawals With 90% Stocks as Bengen Backs 4.7%
3 articles · Updated · Benzinga · Aug 21
Summary
Montgomery said retirees should cap annual withdrawals at 2.8% and hold a 90/10 stock-bond mix to lower the odds of exhausting savings.
His case rests on return assumptions: a 90/10 portfolio could deliver 6.5% inflation-adjusted returns versus 4.8% for a 60/40 mix, while the lower withdrawal rate is meant to absorb volatility.
Montgomery said that 2.8% rate, measured from the last major market peak, could support unchanged spending for five years if stocks fall no more than 30%; he also argues rising markets can later lift spending power.
Bill Bengen, who created the 4% rule, now favors a 4.7% starting rate and says retirees may be able to spend more than 5% with a 65/30/5 portfolio, reflecting a much less cautious view.
The debate highlights a broader split in retirement planning, with other recent research favoring partial annuitization and delayed Social Security, while Suze Orman stresses holding three to five years of cash.
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?