Today I’m tackling a popular and contentious principle in the FIRE community: the 4% rule. I’ve written about a major flaw of the “rule” before, namely that it relies on a false myth of level spending year over year in retirement, but today I’m taking on whether we can actually expect the 4% rule to give us enough of a margin of safety in the future.
It seems that the period of stock market volatility we’ve been in the past few months is here to stay for a while. Does that have you feeling anxious? If so, you’re normal, but you don’t have to stay that way. Learning not to let the markets or their machinations affect you is surprisingly easy to do if you make that your intention. Let’s talk about how.
Today I’m (finally) sharing something that I’ve wanted to write about for a long time, but haven’t tackled because there is no easy formula: how to determine what is “enough” to save for early retirement. “Enough” is perhaps the centrally important concept to early retirement, but it can feel overwhelming to quantify your own. Here’s a breakdown on how we calculated ours, and how you can do the same for your own circumstances.
We’re all getting conflicting signals right now: From financial analysts predicting lousy returns for the foreseeable future, and from early retirees reporting how they’re beating their projections every quarter. We could take away two very different lessons from this dissonance: that we need to make sure our plan is extra solid and based on low projected returns, or that we’re probably overthinking it all and working longer than we need to. We have an opinion on this (always do!), and share why we’re taking the more conservative approach, because: recency bias.