The Richer Retirement Portfolio by William Bengen aims to elevate the old 4% rule by expanding the one’s asset allocation to modern asset options.
Home Country
Portfolio Charts is able to translate portfolio information to the local currency, inflation, and available funds of many different countries. Choose the home country where you live, and it will update every section of the page.
Asset Allocation
How to build a Richer Retirement Portfolio
Asset Notes
1. Bengen specifically recommends 11% large cap blend and 11% mid cap blend. Since I don’t have data for mid caps, I grouped them into the large cap allocation. Note that most large cap funds already cover mid caps.
2. Bengen specifically recommends 11% small cap blend and 11% micro caps. Since I don’t have data for micro caps, I grouped them into the small cap allocation.
Author
Bill Bengen
Bill Bengen is an MIT-educated financial advisor most well-known for quantifying the original 4% rule for retirement. You can read about the Richer Retirement Portfolio in the book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.
Overview
As the original creator of the ubiquitous “4% rule” for retirement that so many investors today take for granted, Bill Bengen has always been in a strange position. On the one hand, his ability to convince an entire generation of retirement planners that effective backtesting is highly important must surely be a pride point. But on the other, Bill has always been refreshingly candid about the limits of his assumptions. And even he will tell you that there’s more to retirement planning than just building your life around a single number without looking deeper.
The Richer Retirement portfolio is named after the book in which he aims to expand upon his classic retirement insights. A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More is more than just a treatise on the benefits of expanding his analysis to assets not before considered. It’s a full guide to withdrawal strategies, tax management, and planning in general with the ultimate goal of putting your money to the best use possible to empower a better life.
While the original 4% rule was based on data from US stocks and intermediate term bonds, the Richer Retirement portfolio not only expands the playing field to various sizes of stocks but also looks beyond US shores to the benefits of international investing. By taking the Classic 60-40 framework and simply subdividing the stock portion to multiple modern options while adding a dash of practical cash, the benefits to safe withdrawal rates are unmistakable. It’s a great new addition to a solid investing foundation for any retiree.
Bengen fans may notice that the asset allocation listed here is a little simpler than the one outlined in his book. He advocates for equal parts large, mid, small, and micro caps, while I simplified it to equal parts large and small caps to match my available data. You can see in the Withdrawal Rates chart that the 4.8% 30-year SWR is virtually identical to the 4.7% SWR he calculated for his specific recommendation. So no matter which version you choose, you should be in the same ballpark.
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Performance
Since 1970, an investor in the United States holding the Richer Retirement earned an average 5.8% real return, with a baseline CAGR of 4.3% over 15 years. It supported a 4.8% safe withdrawal rate for 30 years and 4.1% indefinitely. Its worst peak-to-trough loss was 35%, and the longest a new investment spent below water was under 11 years.
Richer Retirement Portfolio Performance
| # | Metric | What it measures |
|---|---|---|
| 5.8% | Average return | Mean annual return after inflation |
| 4.3% | Baseline real return (15 years) | What 15-year stretches returned in the weaker outcomes |
| 4.8% | Safe withdrawal rate (30 years) | Highest spending rate that lasted 30 years in the worst case |
| 4.1% | Long-term withdrawal rate | The SWR floor over very long retirements |
| 35% | Deepest drawdown | Worst peak-to-trough loss after inflation |
| 11 years | Longest drawdown | Longest a new investment stayed below what you put in |
| 10.3% | Volatility (standard deviation) | Year-to-year variation in returns |
Stats for all home countries
Summary Stats by Home Country
| Home country | Average | Baseline | SWR | LTWR | Deepest | Longest | Volatility |
|---|---|---|---|---|---|---|---|
| Australia (aus) | 4.8% | 4.3% | 3.1% | 2.6% | 50% | 17 years | 11.8% |
| Canada (can) | 5.4% | 3.7% | 4.3% | 3.6% | 31% | 11 years | 9.2% |
| France (fra) | 5.4% | 4.3% | 3.9% | 3.3% | 35% | 14 years | 11.6% |
| Germany (deu) | 5.2% | 4.4% | 3.7% | 3.0% | 38% | 15 years | 12.4% |
| Italy (ita) | 5.4% | 3.7% | 4.4% | 3.6% | 26% | 14 years | 11.6% |
| Japan (jpn) | 5.0% | 1.7% | 3.7% | 2.6% | 44% | 15 years | 13.5% |
| Netherlands (nld) | 4.9% | 3.9% | 3.4% | 2.8% | 41% | 15 years | 12.5% |
| Spain (esp) | 4.7% | 3.3% | 3.2% | 2.6% | 41% | 16 years | 13.1% |
| Sweden (swe) | 6.2% | 4.7% | 4.2% | 3.6% | 33% | 13 years | 12.6% |
| Switzerland (che) | 4.4% | 3.2% | 2.9% | 2.2% | 49% | 19 years | 14.3% |
| United Kingdom (gbr) | 5.1% | 3.7% | 3.9% | 3.2% | 40% | 15 years | 11.7% |
| United States (usa) | 5.8% | 4.3% | 4.8% | 4.1% | 35% | 11 years | 10.3% |
To see this portfolio from a specific home country’s perspective, link readers to this page with ?home=COUNTRY added to the URL, using the codes shown in parentheses in the table above (e.g. ?home=aus). The portfolio itself is fixed by the page, so ?pk= has no effect here. More in the Guide for AI Assistants.
Charts
Different ways to visualize the Richer Retirement Portfolio
Comparisons
How the Richer Retirement Portfolio compares to other options
Alternatives
Portfolios with a similar structure or design intent
Classic 60-40 — The original idea that the Richer Retirement portfolio builds upon.
Three-Fund Portfolio — Similar concept with international diversification but no small caps.
No-Brainer Portfolio — Same choice of stocks in equal weight with short term bonds.
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