Net returns, costs and impact of small-cap indexes

In this episode of the Bogleheads® on Investing podcast, guest Bill Bengen — creator of the famous 4% Rule — joins us to discuss what's changed in retirement spending research and how his new book, "A Richer Retirement," shows retirees how they can spend even more money.

Jon Luskin, CFP®, and Bill cover safe withdrawal rates in today's market, how inflation and the CAPE ratio impact spending, and why adding asset classes like small-cap and micro-cap stocks increased the safe withdrawal rate from 4% to 4.7%.

The episode dives into practical strategies, including front-loaded withdrawals, rising equity glide paths, the role of cash buckets, rebalancing, the spending smile, and why a simple all-in-one fund may be the best approach for do-it-yourself investors.

Whether you're planning for early retirement, looking to maximize spending from your portfolio, or simply trying to understand how much you can safely withdraw, this podcast provides essential insights from the researcher who started it all.

o o o

Jon Luskin, CFP®, a long-time Boglehead and financial planner, hosts this episode of the podcast. The Bogleheads® are a group of like-minded individual investors who follow the general investment and business beliefs of John C. Bogle, founder and former CEO of the Vanguard Group. It is a conflict-free community where individual investors reach out and provide education, assistance, and relevant information to other investors of all experience levels at no cost. The organization supports a free forum at Bogleheads.org, and the wiki site is Bogleheads® wiki.

Since 2000, the Bogleheads® have held national conferences in major cities across the country. In addition, local Chapters and foreign Chapters meet regularly, and new Chapters form periodically. All Bogleheads activities are coordinated by volunteers who contribute their time and talent.

This podcast is supported by the John C. Bogle Center for Financial Literacy, a non-profit organization approved by the IRS as a 501(c)(3) public charity on February 6, 2012. Your tax-deductible donation to the Bogle Center is appreciated.

Show Notes:

Bogleheads® Live with Wes Crill: Episode 45

Bogleheads® Live with Ted Randall: Episode 16

Bogleheads® Live with Paul Merriman: Episode 10

Bogleheads on Investing with Eduardo Repetto, Ph.D. – Episode 43

The Salience of Financial Planning Fees – It’s Not Just About How Much You Charge, But How You Charge

Bogleheads® Live with David Blanchett: Episode 14

Should Equity Exposure Decrease In Retirement, Or Is A Rising Equity Glidepath Actually Better?

Morningstar: Mind the Gap US 2025