Suze Orman: 4% rule is dangerous, Bill Bengen: It's too conservative

Suze Orman never struck me as a math person. She’s more of a personal finance entertainer like Dave Ramsey.

It’s odd that Bill Bengen uses some kind of ill-defined, 3rd Party market timing service to manage his own retirement funds. Be interesting to compare that to the “4% rule” over the past 30 years. I haven’t done the year end 2023 update to my annual “Real Life Retiree Investment Returns” yet, but I’m sure the results are going to be stellar. At year end 2022, someone who maintained a 60/40 portfolio had 4 times their starting balance after 29 years of withdrawals. Those that increased their stock allocation as I did as their portfolios grew likely have double or triple that.

Suze Orman slams the 4% retirement rule as ‘very dangerous’ — while its creator Bill Bengen now says it’s too conservative. What’s the new golden number for your golden years? (

The biggest problem with the 4% rule is that the financial services industry can’t make any money off someone self-managing a portfolio of low-fee index funds. Thus, it’s necessary to sell higher fee products as a “solution” to the 4% rule.

The 4% Rule: ‘Neat, Plausible And Wrong’ (



Yeah, both (Orman and Bengen) are kooky. Orman, like Dave Ramsey, it a good messenger of eliminating debt and living within your means. Opposite of Ramsey, though, she is too conservative with her investments (I once heard her say she had her entire portfolio in municipal bonds. I think she was market timing and would go back to stocks “when the time was right”). Ramsey is too optimistic that 10% or 12% stock returns over time equals a 10% withdrawal rate.

Bengen might be a financial genius, as he first used computers to “mine” data to determine that (for instance) Peter Lynch’s 7% withdrawal rate was too high. And that the real safe rate is about 4%. But since the Great Recession, there have been articles showing him doing major market timing, using a timing guru etc etc. He made a great meal, but he’s afraid to eat his own cooking.

I think I did a good job here of pointing out the flaws of many highly noted financial gurus (Orman, Bengen, Ramsey, Lynch) [snort]!