Once upon a time, in southern California in 1994, there lived a man named William Bengen.⠀
His friends called him Bill.
Bill was born in Brooklyn, and he studied aeronautics at MIT. He wrote a big paper on advanced model rocketry. Then he became an executive at a soft drink company. Finally, 17 years later, he retired to sunny southern California.
Bill was smart and full of energy. He couldn’t stay retired for long. He decided to get a masters in financial planning. He opened his own firm.
And he started reading papers that … bemused him.
You see, at this time, many financial planners were claiming that since the stock market historically returns 7-9 percent compounding rates on average, retirees could withdraw and spend 7 percent of their portfolio. ⠀
Bill had a hunch that this was misguided. He decided to prove it.