Financial Independence / Retire Early Calculator
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Financial Independence / Retire Early Calculator
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Re: Financial Independence / Retire Early Calculator
#2The 4% rule may not be entirely reliable. See: Ben Felix’s YouTube video on the topic. I’d be aiming for a 2% rule and holding some extra cash (call me paranoid).
Re: Financial Independence / Retire Early Calculator
#3The 4% rule may not be entirely reliable. See: Ben Felix’s YouTube video on the topic. I’d be aiming for a 2% rule and holding some extra cash (call me paranoid).
2% is awfully difficult to achieve without some radical lifestyle adjustments before and certainly after retirement.
Nonetheless, it’s a good idea. Instead of cash, however, I would opt for paid part-time work if possible.
A large cash reserve isn’t protected against inflation nor will it grow; the downsides are too big imho.
Re: Financial Independence / Retire Early Calculator
#4For the uninitiated, this calculator is actually for a broader movement called FIRE (Financial Independence Retire Early). They have subreddits at r/financialindependence and r/fire, and variants for the more ambitious like FatFIRE.
The general FIRE modus operandi is to live very financially frugally for a period of time (several years or more) to save as much money as possible to, well, retire early (or at least be comfortable with a less intensive and lower paying job).
Re: Financial Independence / Retire Early Calculator
#5The 4% rule may not be entirely reliable. See: Ben Felix’s YouTube video on the topic. I’d be aiming for a 2% rule and holding some extra cash (call me paranoid).
I think it is warranted to have a conservative estimate given the aging of the population pyramid. There will be more demand for labor relative to supply than post WW2 decades which saw the opposite, increasing amounts of supply of labor relative to demand.
Although, more than cash, a few loyal and useful kids would be a much better play to mitigate those risks.
Re: Financial Independence / Retire Early Calculator
#6I am generally a fan of the FIRE methodology, but recent inflation levels have scared me that, if they are not corrected, saving potentially looses too much value.
Any thoughts on this?
Re: Financial Independence / Retire Early Calculator
#7I am generally a fan of the FIRE methodology, but recent inflation levels have scared me that, if they are not corrected, saving potentially looses too much value. Any thoughts on this?
This shouldn't be a problem if you're invested. There's a reason the S&P went up almost 30% this year - a lot of it was an adjustment for the boost in money supply.
Re: Financial Independence / Retire Early Calculator
#8I am generally a fan of the FIRE methodology, but recent inflation levels have scared me that, if they are not corrected, saving potentially looses too much value. Any thoughts on this?
This shouldn't be a problem if you're invested. There's a reason the S&P went up almost 30% this year - a lot of it was an adjustment for the boost in money supply.
To me, even though the experts say otherwise, this feels very pre-2008. I know the experts are saying to have no fear... but that's what they were saying in pre-2008 too. I guess I'm too nervous to invest and that's on me.
Re: Financial Independence / Retire Early Calculator
#9Earlier quoted context omitted.
This shouldn't be a problem if you're invested. There's a reason the S&P went up almost 30% this year - a lot of it was an adjustment for the boost in money supply.
To me, even though the experts say otherwise, this feels very pre-2008. I know the experts are saying to have no fear... but that's what they were saying in pre-2008 too. I guess I'm too nervous to invest and that's on me.
Experts say to have no fear because as long as you do not sell your assets after they drop in value, the government will be there to pump up the values again.
The only broad market index fund owners that were hurt by 2008 were those that sold at low prices. The people that hung on a couple years were greatly rewarded.
Re: Financial Independence / Retire Early Calculator
#10I am generally a fan of the FIRE methodology, but recent inflation levels have scared me that, if they are not corrected, saving potentially looses too much value. Any thoughts on this?
Most of your retirement savings will be in equities and other assets that have inherent protection from inflation.
You will want a few years spending in cash or near-cash assets, there are inflation protected securities that you can use for that.