Does the 4% Rule Still Work?

Summary

Ben Carlson and Duncan Hill answer audience questions on whether diversification is finally working, the trade-offs of tax-advantaged retirement accounts, how to think about emerging markets, whether to keep a low-rate home as a rental, and whether the 4% rule still works. Ben notes that international, emerging-market, small/mid-cap, bond, and hard-asset exposures have recently outperformed but frames the shift as possibly cyclical rather than a confirmed secular trend. He favors keeping flexibility across taxable and retirement accounts, warns against overconcentrating in residential rental real estate, and describes a flexible retirement-spending approach using a TIPS ladder plus variable stock withdrawals.

• US large-cap dominance has recently been challenged by international, emerging-market, small/mid-cap, bond, and hard-asset performance.
• Ben views the non-US outperformance as potentially cyclical and unconfirmed as a long-term trend.
• Emerging markets have a long boom-bust history and may be in another outperformance phase, but Ben is unsure.
• Ben is more open to taxable brokerage accounts for flexibility rather than putting all savings in tax-deferred retirement accounts.
• For a homeowner with a low mortgage rate, Ben warns against keeping the old home as a rental due to concentration, operational burden, and opportunity cost.
• Ben discusses the 4% rule's conservatism and favors flexible withdrawal strategies, including a TIPS ladder and variable stock spending.
• The show is educational and answers individual audience questions rather than making specific security recommendations.