> You can retire in -14.1 years at age 40
I'm very interested, where can I sign up for -14.1 years?
Financial Independence / Retire Early Calculator
11–20 of 65 posts
Re: Financial Independence / Retire Early Calculator
#12I 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.
> 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.
This is commonly repeated and feels like it doesn’t hold up to scrutiny.
2021 was the third time in a decade with ~30% returns.
https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
Maybe it’s partly true but there’s no way that’s the whole explanation and if anything it’s probably just a better explanation for why last year wasn’t flat or negative.
Re: Financial Independence / Retire Early Calculator
#13For 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…
> 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).
This is a subset. The only real mechanism/requirement is saving enough to retire or be financially independent, over whatever timeframe you want. That means typically means 20-30% or higher savings rate on income. One way to increase your savings rate is to have low expenses -- live frugally, as you say. The other way is to have high income.
Re: Financial Independence / Retire Early Calculator
#14> You can retire in -14.1 years at age 40 I'm very interested, where can I sign up for -14.1 years?
I got a similar result! I put in my age (59) and my liquid savings amount and got the answer:
> You can retire in -13.4 years at age 45.
I'm not sure, given inflation and the taxes that I'm going to want to retire while I can still earn an income.
Re: Financial Independence / Retire Early Calculator
#15I 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?
The historical models account for inflation -- including vastly higher rates than we are experiencing today.
Re: Financial Independence / Retire Early Calculator
#16These calculators never account for portfolio volatility.
Re: Financial Independence / Retire Early Calculator
#17I 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?
Your exposure to inflation is limited to cash balances, and therefore shouldn't a big concern. A bigger problem is, in my opinion, the low interest rates, because that means you'll be forced to take on risk (e.g. invest in stocks, rather than treasuries) if you want to get any meaningful return on you investments.
Re: Financial Independence / Retire Early Calculator
#18These calculators never account for portfolio volatility.
If you haven't already, check out the "Projection method" drop down. If that isn't accounting for portfolio volatility, can you explain how it should do so?
Re: Financial Independence / Retire Early Calculator
#19Nice! Looks pretty good as long as I stay here in Central-Eastern Europe and live a minimalist lifestyle. (Buy second-hand clothing, used gadgets, no car as long as possible etc.)
Actually promoting a materially minimalist life is very healthy, because - as long as it's voluntary - it lets one focus on maximizing happiness not coming from material possessions.
Re: Financial Independence / Retire Early Calculator
#20The 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).
> The 4% rule may not be entirely reliable. See: Ben Felix’s YouTube video on the topic.
Felix (and Cameron) recently interviewed Bengen (who came up with the rule) on their Rational Reminder podcast, and it may actually be 4.5% now:
* https://rationalreminder.ca/podcast/135
* https://www.youtube.com/watch?v=_nYTrCxluaY
In 2006 he had it at 4.5% and in October 2020 at 5%:
* https://www.fa-mag.com/news/choosing-the-highest-safe-withdr...
The reason being is inflation.
The really high inflation of the 1970s (and 1980s) chewed up savings for retirees and brought down SAFEMAX down, but in the 1950s and '60s it was actually 5% per Bengen.