I've often heard 4% used for a fixed-income withdrawal rate. Would it ever be appropriate to use a smaller rate, say 2%, to have increasing income each year in retirement? Can you speak to this at all? But I mean, I think when you say fixed

income withdrawal rate, really it's a safe withdrawal rate based on the Trinity study, and and everybody—and I'll let Bo kind of add where the rules vary—but the Trinity study was assuming a normal retirement age of 65, you know, and and that's where the 4% rule kind of came from. Now, look,

things have gotten a little different because there's trends in personal finance where people are saying, 'Hey, I don't want to work until I'm 65.' But so how does all that—I mean, what would you add to what Tyler's saying, and how does

time impact that? Yeah, so one of the things we've done a lot of episodes on is the FIRE movement, or as we like to call it, the FINE movement for folks who want to exit the workforce earlier than traditional retirement age. And what we said was the 4% rule is a great back-of-

the-napkin solution for folks that are going to have a normal retirement. If you're going to retire at age 65 and you're going to live until 85 or 95, 4% likely works. But if you're someone who is going to leave the workforce early, then

you may want to think about using a lower withdrawal rate because the portfolio is going to have to provide for you for a longer period of time. Now, here's what happens: So, one, yes, could I use a lower withdrawal rate than 4% to be able to account for fluctuations in my

Spending for sure, and I think there were even some inflation assumptions inside the original Trinity study when they said the 4% withdrawal rate. But here's what we find in practice, because we obviously do this as our day job with a number of retired individuals.

Most folks, when it comes to their retirement living expenses, it's not a flat percentage. It's not like, okay, it's January 1st, what's my percentage? Okay, how much can I pull out? Okay, I'm going to do that, and then get to December 31st. We try

to build it to where it's based more on, okay, what's the lifestyle that you want to live in retirement? Then what are the other income sources? And you're going to find that that withdrawal rate varies through time. Some years it might be 3%;

some years it might be 5.5%, and some years it might be 4%. Then Social Security starts, and then your withdrawal rate drops down to 2% or 2.5%. So there are a number of ways, when you get to retirement, where

it's actually much more dynamic than I think we think it is academically. But for planning purposes, when you're trying to figure out your number, you're trying to forecast what should I be saving towards? If you think you want to have a higher lifestyle, or if you think that

you want to have a longer retirement or financial independence period, I don't think there's anything wrong with using a lower than 4% withdrawal rate to do that. Well, here's the reality: I think when you're younger—I'm talking my 30-year-olds, my 40-somethings—it's nothing

Wrong with having what I call 'napkin financial planning' rules, and that's what the safe withdrawal rate, or the 4% rule, does for you. Let you kind of see what the target is so you can start having some metrics to measure yourself by when you get within 5 years

Maybe even 5 years of actually landing the plane. Um, it's just you need more because it gets into everything B said. This is the part where I remember I tell you guys, look, you don't have to go looking for it; it's going to find you

Naturally, this is one of those complexities where the personal/impersonal finance... you don't want—you don't—you've only got one retirement; you don't want to try to figure this all out all by yourself. Go talk to somebody who's done this hundreds, if not even

thousands of times, so that you can know where your blind spots are, know how to handle this. And that's one of the main things we're doing is, you know, we're running the Monte Carlo simulations every year, updating it for what life goals are coming your way, um, because it

sounds cool in practice to say, 'Hey, I'll just make sure I have this,' and in most scenarios it works, but every now and then you need to have something that customizes this for your life because, um, you know, we all look like humans from a

far off, but then when you get really close, your eyes... we all have a lot of differences. You know, we... there's a lot of unique things about every one of us that makes us special. So make sure you're maximizing this time you get on

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