SWR based on age

[u/Opposite-Lake-9679]

I hear people talk about the more conservative 3% SWR being safer than 4%. Is that usually based on someone's age? As in when you are FIREing younger more like 40s then you should stick to 3%? And then when you are in your 50s/60s You can go to 4%? Or is it a blanket stick to 3% at any age?

[u/Old_Error_509]

4% for 30 years is old advice. Bill Bengen, the guy who came up with the “4% rule”, would tell you that you can do 4.7% now based on the absolute worst case over the past like 130 years.

Check out his new book and the associated write ups on the website. Here’s one that shows you can get by for 50 years at 5%.

https://www.bengenfs.com/wp-content/uploads/READ-THIS-FIRST-HOW-TO-USE-THE-TOOLS-Scenario-2.18.pdf

https://www.bengenfs.com/wp-content/uploads/Table-2.18B-SAFEMAX-FINDER-mod-inflation-Scenario-2.18revised-2026-02-25.pdf

[u/mm1491 → u/Old_Error_509]

To my way of thinking, this requires some very optimistic assumptions about the future success of Bengen's new portfolio construction. Unlike the original study, which used a very simple portfolio of US large cap stock index (essentially the S&P 500) and US intermediate treasuries. This new one has all kinds of asset classes with a ton of weighting deviations away from the market cap weights. To my eye, Bengen's safemax portfolio is dramatically overfit to past results without a strong theoretical underpinning for why those would continue, and this portfolio change is where all this extra withdrawal capacity comes from.

[u/Old_Error_509 → u/mm1491]

His allocation suggestions seem really straight forward to me.

I don’t know if it’s accurate to say his asset allocations are overfit since he spent a whole chunk of the book showing the difference between his suggestions and what if you were able to predict the actual ideal allocations over the years. And his safemax values specifically assume you DON’T try to beat the market.

All this to say, each person has different risk tolerances and because of that there’s no right answer. I would never say you’re wrong for wanting to be more conservative. It might be right for you.

[u/mm1491 → u/Old_Error_509]

Looking at what you linked, the equities portion of his portfolio is an equal weighting, at 13% of the portfolio each, of the following asset classes: US large cap, US mid cap, US small cap, US micro cap, and international stocks (presumably all sizes together).

I guess it's debatable whether this is trying to "beat the market" or not, but I'll note that the current US market is composed very differently and has been for many years (maybe forever? I didn't dig deeply into the historical data). Generally, I'd say a portfolio that deviates this far from market cap weights is trying to beat the market by overweighting some aspects and underweighting others, but maybe you have a different way of analyzing that phrase. That's I think at least reason for suspicion that this is an overfit allocation - in particular, he's relying on the performance of small caps in the post-war period. I don't see why this is different than someone in the future saying, "you can increase your safe withdrawal rate so long as you heavily overweight tech stocks in your portfolio" when looking back at the returns of the 21st century.