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Bristol-Myers Squibb Employees: The 4% Rule is Outdated—Here's How to Spend More in Retirement

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'Bristol-Myers Squibb employees, by embracing a more diversified retirement portfolio and the updated 4.7% withdrawal rule, can potentially create a sustainable retirement income aligned with today's economic conditions, enabling them to live more comfortably without outliving their savings.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Bristol-Myers Squibb employees can benefit from adopting Bengen's updated 4.7% withdrawal rule, as it provides a more flexible and sustainable approach to retirement planning, allowing them to withdraw larger amounts while still focusing on their long-term financial goals.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

The evolution of the 4% withdrawal rule and its updates.
The importance of diversification in retirement portfolios.
How retirees, especially those at Bristol-Myers Squibb, can benefit from the revised withdrawal strategy.

For many years, both pensioners and financial advisers have debated the idea of a sustainable withdrawal rate for retirement funds. The 4% rule, first proposed by Bill Bengen in 1994, quickly became a key guideline in retirement planning. According to this approach, in the first year of retirement, pensioners could withdraw 4% of their retirement funds; each year after that, the amount would be adjusted for inflation. The goal was simple: help pensioners live for 30 years without depleting their funds. However, after decades of success with this technique, Bengen has recently re-examined his strategy and concluded that retirees may be able to spend more than originally thought.

The 4% Rule’s Evolution

The financial community quickly embraced Bengen's original study after its publication in the Journal of Financial Planning in 1994. Using a straightforward portfolio of U.S. large-company equities and U.S. 5-year bonds, Bengen offered a simple method for pensioners to determine how much they could withdraw from their retirement savings. However, even as the 4% rule gained popularity, it overlooked important factors like inflation rates, asset allocation, and market volatility—issues that could arise in retirement.

By 2022, Bengen revisited his decades-old guideline. After a long career of studying retirement planning, he experienced what he called a 'breakthrough moment.' Instead of viewing stock returns as the primary factor in withdrawal rate calculations, Bengen realized that inflation should be given more weight. Consequently, he revised the 4% rule, raising the withdrawal rate to 4.7%. This change accounts for a more diversified portfolio and a broader mix of asset classes, offering retirees a more sustainable and generous approach.

Introducing the New 4.7% Rule

Under the updated approach, a retiree with $1 million in savings could withdraw $47,000 in their first year of retirement. This amount would then be adjusted for inflation in subsequent years, just as in the original 4% rule. However, the key change lies in asset allocation. The original rule was based on a basic stock and bond portfolio, while Bengen's revised model includes a diverse mix of asset classes such as international equities, bonds, small-cap stocks, and large-cap U.S. stocks. With this diversification, the 4.7% rule is considered a “worst-case scenario” for retirees hoping to avoid exhausting their funds within 30 years.

The Importance of Diversification

Bengen’s updated approach is backed by years of research and portfolio optimization. The more diversified portfolio—comprising U.S. stocks, foreign equities, bonds, and small-cap stocks—aims to offer greater stability. Bengen’s findings show that, under certain conditions, retirees could withdraw as much as 7% of their savings annually, especially if their portfolios were well-diversified. However, Bengen's study also emphasized the importance of rebalancing your portfolio regularly to align with your financial goals and risk tolerance as a retiree.

For those at Bristol-Myers Squibb, this revised withdrawal rate carries real implications. With the 4.7% rule, you can notionally spend more during retirement without depleting your funds—provided your portfolio is well-diversified. Given the changing financial landscape, Bengen believes retirees today, even those from large corporations like Bristol-Myers Squibb, may be able to withdraw between 5.25% and 5.5%, particularly in times of moderate inflation and high market valuations.

A Historical Perspective on the 4% Rule

Despite its appeal, the original 4% rule wasn’t without flaws. Bengen’s initial model didn’t account for prolonged low interest rates, market crashes, or long stretches of low inflation, all of which could impact a retiree’s financial stability. In response, Bengen began to expand his research and include more types of assets to increase stability.

His updated model showed that retirees who retired during economic downturns, like in the 1970s, needed to take a more cautious approach to withdrawals. In such circumstances, a 4.7% withdrawal rate would have been the most prudent option. On the other hand, retirees who experienced more stable financial times could comfortably withdraw around 7% of their savings. This illustrates how critical it is to account for the state of the economy when planning for retirement.

Adapting to Today's Economic Climate

The economic climate today is vastly different from the turbulent 1970s. Inflation is coming back under control, and stock market valuations are high. According to Bengen’s latest research, retirees today can potentially withdraw between 5.25% and 5.5% of their savings each year, depending on market conditions. This adjustment makes sure that retirees maintain their purchasing power and enjoy a fulfilling retirement over the long term.

Even with the current market conditions, Bengen remains cautious. Given the high market valuations, he advises retirees, including those working for large companies like Bristol-Myers Squibb, to remain mindful. While the 4.7% rule might still be a reliable option in the long run, it’s crucial for retirees to diversify their holdings and periodically revisit their withdrawal plans.

A Shift in Perspective

Bengen’s updated strategy might seem bold or controversial to those who have relied on the 4% rule for decades. After all, the 4% rule became a widely accepted approach, praised for its reliability and simplicity. However, Bengen believes in challenging long-held assumptions to improve financial planning, which includes adapting strategies to reflect changing market conditions. He encourages open discussions and critical thinking about retirement strategies, as this will ultimately lead to better planning and more financial independence for retirees.

In Conclusion

Bengen’s revised 4.7% rule offers retirees, including those at Bristol-Myers Squibb, a more generous and adaptable framework for managing retirement funds. By diversifying portfolios, rebalancing regularly, and staying attuned to current economic conditions, retirees can potentially take out larger withdrawals without fearing their money will run out too soon. While the 4% rule still holds historical value, it’s time for retirement strategies to evolve, reflecting the changing economic landscape. This updated strategy empowers retirees to live with greater financial independence and potentially enjoy a higher standard of living during retirement.

Research by the Financial Planning Association (FPA) also highlights how diversification can help enhance retirement stability. Incorporating alternative assets like commodities, bonds, and real estate into traditional portfolios can help retirees manage risk and maintain higher withdrawal rates. By diversifying, retirees may be better able to support their financial well-being, even during periods of economic uncertainty.

Bristol-Myers Squibb employees can now benefit from a more sustainable retirement withdrawal strategy thanks to Bengen’s 4.7% rule. The updated approach allows retirees to withdraw more money each year, benefiting from better asset diversification and a more comprehensive understanding of current market dynamics. It’s time to adjust your retirement strategy to reflect the current economy—so you can enjoy a more independent and fulfilling retirement.

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Sources:

1. The Wealth Advisor Staff. 'The 4% Rule Creator Reveals the New Safe Retirement Withdrawal Rate.' The Wealth Advisor, April 2025.

2. 'Diversify or Risk Running Dry: 12 Additional Income Streams For Your Retirement.' Investopedia, May 2025.

3. Kiplinger Staff. 'Why Keeping Growth in Your Portfolio After 70 Is Crucial for Your Financial Health.' Kiplinger, June 2025.

4. Financial Planning Association. 'Retirement Withdrawals: The 4% Rule Has Gotten a Boost.' YouTube, March 2025.

5. Nasdaq Staff. 'The Importance of Diversifying Your Retirement Portfolio.' Nasdaq, July 2025.

How does the Broward Health Cash Balance Pension Plan ensure the financial security of its employees upon retirement, and what are the specific benefit options available to employees who retire or terminate employment with Broward Health? Discuss the implications of choosing a lump sum versus a monthly benefit and how these choices affect overall retirement income.

Financial Security and Benefit Options: The Broward Health Cash Balance Pension Plan provides financial security by offering a defined benefit based on hypothetical account balances. Upon retirement or termination, employees can choose between a lump sum payment or a lifetime monthly benefit. The lump sum provides immediate access to funds, but opting for a monthly benefit ensures a steady income throughout retirement, which could lead to a more stable financial situation over time.

How does the retirement savings plan at Bristol-Myers Squibb Company compare to similar plans in the biotech and pharmaceutical industry, particularly regarding company matching contributions and employee deferral options? What factors should employees consider when deciding how much to contribute to their retirement accounts at Bristol-Myers Squibb Company?

Early Retirement Accommodations: Employees can retire early if they are at least 55 years old and have completed 5 years of vesting service. Benefits received upon early retirement are typically smaller compared to those received at the normal retirement age of 65. The normal form of benefit payment for early retirees is an actuarially adjusted life annuity based on the cash balance account at the time of early retirement(Broward Health_June 201…).

Bristol-Myers Squibb Company offers various retirement plans, including 401(k) plans and non-qualified deferred compensation plans. Can employees elaborate on the differences between these plans and how each one impacts their long-term retirement savings? Furthermore, how can an employee evaluate which plan best suits their individual retirement goals?

Vesting Schedule and Rights: The Broward Health Cash Balance Pension Plan uses a vesting schedule that grants full vesting rights after 5 years of service. Employees with fewer than 5 years of service are not eligible for benefits and forfeit their account balance. Vesting means employees gain the right to their accrued benefits, which become payable when employment ends(Broward Health_June 201…).

Based on the changes in IRS regulations for 2024, how might they affect Bristol-Myers Squibb Company's retirement and savings plans? Are there any new contribution limits or eligibility rules that employees should be aware of, and how can they adapt their savings strategies accordingly?

Role of the Pension Plan Committee: The Broward Health Pension Plan Committee administers the Cash Balance Pension Plan, ensuring compliance with laws and the plan’s financial health. The committee is responsible for investment decisions and approving plan changes, and it ensures that benefits are paid accurately and in a timely manner(Broward Health_June 201…).

What are the implications of taking an early withdrawal from retirement funds at Bristol-Myers Squibb Company, and how does it affect an employee's financial future? Employees should also consider what alternatives to early withdrawal exist within the company's policy framework.

Changes or Amendments to the Plan: The plan can be amended or terminated, but employees' vested rights are protected. Changes do not reduce accrued benefits from prior contributions, and the plan's termination follows a specific order to prioritize benefit distributions(Broward Health_June 201…).

Employees often have questions about post-retirement benefits, especially concerning medical coverage. What policies does Bristol-Myers Squibb Company have in place to ensure continued healthcare coverage for retirees, and what are the eligibility criteria for these benefits?

Recognition of Past Service upon Re-employment: If employees return to Broward Health after a break, their prior service may be recognized depending on vesting and benefit conditions at the time of rehire. Those who were vested before leaving can have their prior benefits restored, and contributions can resume after re-employment(Broward Health_June 201…).

How does Bristol-Myers Squibb Company handle the integration of pension benefits during mergers or acquisitions, and what can employees expect if they find themselves in such a situation? It would also be important for employees to understand their rights and options during these transitional phases.

Beneficiary Designations: Employees can designate beneficiaries to receive benefits if they die before or after retirement. Beneficiaries can receive lump sums or monthly payments, depending on the employee's retirement eligibility. Failure to designate a beneficiary may result in benefits going to the surviving spouse, children, or other family members as per the plan's order of priority(Broward Health_June 201…).

In light of recent company performance, what are Bristol-Myers Squibb Companyâ€™s future benefits projections, especially regarding pension plans? How can employees utilize this information to better plan for their retirement saving strategies?

Interest Credits on Accounts: The interest credits for cash balance accounts are determined based on U.S. Treasury rates, with a minimum annual interest rate. Interest is applied monthly, enhancing the account value and ensuring that employees' retirement savings grow over time(Broward Health_June 201…).

Given that Bristol-Myers Squibb Company has a robust benefits architecture, what specific programs or platforms are in place for employees to seek clarifications on their retirement benefits? How can Bristol-Myers Squibb company employees efficiently navigate these resources to address their individual inquiries?

Challenges in Filing Claims: The process for filing retirement claims involves notifying Broward Health and submitting the necessary paperwork 30 to 60 days before retirement or termination. In case of a denied claim, employees have the right to request a review and appeal, ensuring fair treatment and timely resolution(Broward Health_June 201…).

For employees looking to gain more information about retirement benefits and other related policies, how can they contact Bristol-Myers Squibb Company effectively? What communication methods are recommended to ensure that their questions are addressed promptly and comprehensively? These questions should provide employees with a deeper insight into their retirement planning while encouraging them to explore the benefits offered by Bristol-Myers Squibb Company further.

Contacting Broward Health for Information: Employees can contact the Employee Benefits department at Broward Health to learn more about the Cash Balance Pension Plan. Resources such as retirement counseling sessions and detailed plan descriptions are available to help employees understand their benefits and make informed decisions(Broward Health_June 201…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

In process of terminating U.S. Retirement Income Plan, transferring $3.8 billion of its pension obligations. Previous $1.4 billion transfer to Prudential for 8,000 retirees.

Bristol-Myers Squibb announced a restructuring plan that includes layoffs of approximately 1,200 employees.

Bristol-Myers Squibb offers RSUs to executives and certain employees. The RSUs vest over a three-year period, promoting long-term company performance and employee retention.

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For more information you can reach the plan administrator for Bristol-Myers Squibb at 430 East 29th Street New York, NY 10016; or by calling them at +1 212-546-4000.