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CUNA Mutual Group Employees: The 4% Rule is Outdated—Here's How to Spend More in Retirement

'CUNA Mutual Group 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.

'CUNA Mutual Group 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 CUNA Mutual Group, 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 CUNA Mutual Group, 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 CUNA Mutual Group, 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 CUNA Mutual Group, 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 CUNA Mutual Group, 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.

CUNA Mutual Group 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.

What are the key differences between defined benefit plans and defined contribution plans offered by CUNA Mutual Group, and how might these differences affect my retirement benefits? As an employee of CUNA Mutual Group, understanding the nuances of defined benefit plans versus defined contribution plans is critical for effective retirement planning. Defined benefit plans typically promise a specific payout at retirement based on factors such as salary history and duration of employment. In contrast, defined contribution plans, like 401(k) plans, depend more on employee contributions and investment performance. Given the volatility in investment returns and changing employment patterns, employees might find themselves at a crossroad between predictable retirement income versus self-directed savings and investment risks. It's vital to explore how these plans could impact long-term financial security at retirement.

A defined benefit plan at CUNA Mutual Group offers predictable retirement payouts, typically based on salary history and years of service, ensuring employees a guaranteed income in retirement. In contrast, defined contribution plans, such as a 401(k), rely heavily on individual contributions and investment performance. Employees may face risks with defined contribution plans due to market volatility but benefit from greater control over their retirement savings. Depending on your financial situation and retirement goals, these differences can impact how secure your future income will be, either through guaranteed payouts or potential growth in investments.

How are pension costs determined in a defined benefit plan at CUNA Mutual Group, and what factors can influence these costs over time? The cost structure of a defined benefit plan at CUNA Mutual Group is predicated on various components, including service costs, interest costs, expected returns on assets, and amortization of gains and losses. Understanding these factors helps in managing potential burden changes on the organization's budget and employees' retirement expectations. For instance, factors such as fluctuating interest rates can significantly alter the present value of future liabilities, affecting the costs that CUNA Mutual Group bears. Employees should be versed in these aspects to contextualize their retirement benefits.

Pension costs at CUNA Mutual Group are influenced by factors such as service cost (new benefit accruals), interest cost (growth on past benefits), expected return on plan assets, and the amortization of gains or losses. Changes in these factors, like fluctuations in interest rates or salary adjustments, can affect the overall cost of the plan. Employees should be aware of how these variables impact their future pension benefits and how changes to the company's funding strategy could alter expectations.

What strategies can CUNA Mutual Group adopt to manage the costs and benefits of its defined benefit plan without drastically impacting employees' retirement security? CUNA Mutual Group faces the challenge of balancing cost management for its defined benefit plan while also ensuring that employees have adequate retirement benefits. Options like freezing benefit accruals, amending contribution formulas, or shifting to defined contribution plans can be explored. However, such strategies must be handled delicately to avoid significant disruptions to employees' retirement planning. Understanding employee concerns and the potential ramifications of these strategies is crucial to formulating a balanced approach.

CUNA Mutual Group can adopt strategies such as freezing benefit accruals, transitioning to cash balance designs, or reducing benefit formulas to manage costs. These strategies may lower expenses but must be carefully balanced to avoid significantly affecting employees' long-term retirement benefits. Clear communication about potential changes and their impact on retirement income is crucial for employees to adjust their retirement planning.

In what ways could regulatory changes influence the CUNA Mutual Group's pension plan design and its offerings to employees after retirement? Regulatory bodies frequently revise guidelines that govern employee benefit plans, potentially impacting how CUNA Mutual Group structures its pension offerings. For instance, changes to tax policies or pension funding requirements could affect administrative decisions regarding contribution levels or payout structures for defined benefit plans. It is imperative for employees to stay apprised of these regulations so they can understand any changes that might occur in their future benefits and what steps CUNA Mutual Group might take to adapt to new compliance needs.

Regulatory changes, such as adjustments in pension funding requirements or tax policies, can have a substantial impact on CUNA Mutual Group’s pension plan design. Changes in laws may require adjustments to benefit levels, contribution structures, or funding strategies. Employees should monitor such regulatory shifts to understand how they could influence future pension payouts and retirement strategies.

Could you explain the process employees at CUNA Mutual Group would need to undertake to access their retirement benefits upon leaving the company? For employees transitioning from CUNA Mutual Group to other ventures, itâ€™s essential to understand the process involved in accessing retirement benefits. This process may involve determining eligibility for pension payouts, selecting between lump-sum distributions or annuitized payments, and understanding how past contribution levels affect final benefits. Employees are encouraged to seek guidance from the HR department or pension plan administrators to navigate this process thoroughly.

When leaving CUNA Mutual Group, employees need to assess their eligibility for pension benefits, choose between lump-sum payouts or annuities, and understand how their years of service and contributions affect the final payout. It's advisable to consult with HR or a plan administrator to navigate the options and ensure that the benefits are accessed appropriately.

What tools and resources does CUNA Mutual Group provide to assist employees in planning for retirement effectively? CUNA Mutual Group offers various resources designed to support employees in their retirement planning journey. These might include access to financial planning tools, informational webinars about defined benefit and contribution options, or one-on-one consultations with benefits specialists. Employees should actively participate in these offerings as a means of optimizing their retirement readiness and ensuring they are leveraging all available benefits to the fullest extent.

CUNA Mutual Group offers several resources for retirement planning, such as access to financial planning tools, retirement webinars, and consultations with benefits specialists. These resources are designed to help employees make informed decisions about their defined benefit and defined contribution options, ensuring they optimize their retirement strategies.

How does the CUNA Mutual Group approach the issue of pension funding, and what implications does this have for current and future employees? The funding strategy for the pension plan at CUNA Mutual Group has significant implications for the benefits that employees can expect. A well-funded pension plan can provide assurance for employees about the stability and security of their retirement income. Conversely, fluctuations in the funding status could lead the organization to consider changes in benefit formulas or contribution strategies. Employees should be aware of how funding levels could affect their future benefits and the overall health of the pension plan.

CUNA Mutual Group’s pension funding strategy is critical to maintaining the stability of retirement benefits. A well-funded plan assures employees of predictable payouts, while underfunded plans may lead to changes in benefit formulas or contributions. Employees should stay informed about the funding status, as it could affect the future security of their pension income.

What should employees at CUNA Mutual Group know about the potential risks and benefits associated with their defined benefit plan? Employees should have a clear understanding of the inherent risks and benefits linked to CUNA Mutual Group's defined benefit plan. While these plans offer predictable retirement income, they are subject to various risks such as underfunding issues, market volatility, and regulatory changes. This understanding equips employees with knowledge about their eventual retirement income and helps them plan strategically alongside their professional developments or transitions within their careers.

Employees need to understand that defined benefit plans at CUNA Mutual Group provide predictable retirement income but come with risks such as underfunding, economic fluctuations, and regulatory changes. By staying informed about these risks, employees can better plan for their financial security in retirement, potentially supplementing their pension with other savings strategies.

What happens to my retirement benefits if CUNA Mutual Group decides to freeze its defined benefit plan? The implications of freezing a defined benefit plan at CUNA Mutual Group would be substantial for employees. Understanding the details surrounding such a freeze, including whether it would impact future accruals or merely limit new benefits for incoming participants, is crucial. Employees should consider consulting HR for comprehensive information regarding their specific situations and how a freeze could influence their expected retirement payouts.

If CUNA Mutual Group freezes its defined benefit plan, employees may no longer accrue new benefits, though they retain previously earned benefits. A freeze could impact future retirement income, particularly for employees nearing retirement, as they could miss out on years of service accruals or salary increases factored into their final benefit calculation.

How can employees contact CUNA Mutual Group to inquire further about their retirement benefits and related services? To learn more about retirement benefits, employees should reach out directly to CUNA Mutual Groupâ€™s HR department or designated pension plan administrators. The organization provides channels such as in-person meetings, phone consultations, and online resources which are specifically structured to assist employees with inquiries related to their retirement benefits and participant obligations. Employees can also explore dedicated web portals for additional information and updates on their pension plans.

Employees can contact CUNA Mutual Group directly through their retirement solutions division at 1-800-356-2644 or visit the website at CUNA Mutual Retirement Solutions for more information about retirement planning services and personalized assistance with their retirement benefits.

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For more information you can reach the plan administrator for CUNA Mutual Group at 5910 Mineral Point Rd Madison, WI 53705; or by calling them at (608) 238-5851.