William Bengen

William Bengen

Former president, Bengen Financial Services

William Bengen, 70, former president of Bengen Financial Services and developer of the "4% rule," shows what can happen when you combine unexpected skills with unexpected backgrounds.

After more than 20 years with his family's New York-based 7-UP bottling plant, he sold it and started a new, unplanned life in California with his family in 1988. Around that time, he read a magazine article about the new field of financial planning and decided that would be his next career.

After five years in practice, clients were asking how much they could safely withdraw from retirement savings without running out of money. Not finding the answer, Mr. Bengen combined his engineering training with his own spreadsheets and studied the data.

His findings were published in the Journal of Financial Planning and challenged common wisdom. The article caused a sensation.

The rule states that, generally speaking, withdrawing 4.5% the first year from tax-deferred retirement funds and increasing the annual withdrawal based on inflation enables the portfolio to last 30 years or more. (When he created the rule in 1994, Mr. Bengen set the initial withdrawal rate at 4%.)

"It surprised the hell out of me. I started getting feedback from readers, getting invited to conferences. It grew like topsy," Mr. Bengen said.

Drawing from his experience: as an aerospace undergrad (MIT '65), a CEO of his family's 7-Up bottling plant and a financial adviser, Mr. Bengen applied his natural curiosity and made a huge splash in the financial industry.

Now retired, he focuses on family, community and more writing. He's working on three projects at once: a work of fiction, continued retirement investment research and a serial on American culture in the 1950s.

– Deborah Nason


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