Does anyone else thinks we should adopt the 30x rules instead of 25x?

I am a fan of a 5% withdrawal rate rather than a 4% mostly because I would be willing to reduce spending or start part time work in the small chance of something going terribly wrong. On average with 4% withdrawal rate you end up like 5x your inflation adjusted starting balance at the end of your lifetime. I dont think I'd be able to see my portfolio cut in half over 2 years and continue making the same 4% (inflation adjusted) withdrawal rate that I started with. It seems natural that people would tighten their belts in a big recession. I can totally get behind a 5% withdrawal rate that only needs 3.33% for minimum fixed expenses though.

It's all about recency bias. Just check the comments, every one things the past decade bonanza is the norm. Just wait until the market is down 40% or 50% again and it will be the 50x rule. I totally agree and actually plan on the 30x. Thank you for bringing that up

Having FIed 7 years ago and FIREd 5 years ago (with a FI wife who will join me in FIRE likely next year... BEFORE we put our 2 teens through college and increase our empty nest traveling budget), I highly recommend using "25x" for PLANNING purposes. It's directionally accurate and gives breathing room for the many variations to the plan execution that will, inevitably, pop up.

Then, as you approach that, actually do a real assessment of what your "next chapter" lifestyle will REALLY look like, with wiggle room. There WILL, inevitably, be other "chapters" after that with different life goals/expenses/timing. Again, I'd declare "FI" at 25x. A real retirement plan, done with an advice-only, fiduciary CFP can help you sort out what your life/spending goals actually are, stress test your resources against those, and help aim you at the most efficient way to fund your retirement (possibly with other enhancements).

As you approach FI, realize that a 100% Equity portfolio's volatility does realistically mean that you could very well be tracking on FI in just a few years, only to have the market drop by 50%, or stay down for a decade, significantly delaying your FI/FIRE. Do consider "Kitces Bond Tenting" not into Bonds, but your Retirement Phase portfolio in the last few years (decade?) of Accumulation Phase to fairly significantly increase the probability of attaining FI as close to the target number of years left as possible. The absolutely logical best Retirement Phase portfolio, for the vast majority of retirees, would be one optimized for "highest Safe Withdrawal Rate (SWR)". SWR already considers volatility/SoRR and that metric indicates the safety in withdrawing (higher) amounts of money out of your portfolio, annually and in your plan's duration. The Golden Ratio portfolio

Golden Ratio Portfolio – Portfolio Charts

The Golden Ratio Portfolio by Frank Vasquez is a risk parity asset allocation that mixes modern assets in classic percentages to balance risk.

Portfolio Charts

is currently #1 for highest SWR (see #1 rank in Column 4, "Safe WR"

) and means that a retiree could reasonably extract about 20-25% MORE money, annually, as safe or safer, than holding a 100% Equity Portfolio (Total Stock Market portfolio)

Total Stock Market Portfolio – Portfolio Charts

or "Classic 60-40" 2-fund portfolio.

Classic 60-40 Portfolio – Portfolio Charts

That's a huge pay raise + booster of probability of plan success. Do look at the PERFORMANCE tables for each of these portfolios, side by side, for comparison, especially for Drawdown and Withdrawal Rates.

We're nearly 100% Golden Ratio at this point, under-drawing the SWR (5% for our duration) for the portfolio for the next 1.5 years (until college). As 1, then 2 kids go to college, and we increase empty nest travel while maintaining our home base, we'll either safely exceed SWR for the few peak years of dual-college (expecting expenses/Withdrawal Rate to drop significantly after) or spread those expenses out over the next few years within SWR - our total expenses dropping off significantly. After getting past our highest expense years of dual early retirement (2x college), we plan on adding risk-based guardrails, shifting our plan Probability of Success to 80% (assessed and adjusted annually) to further increase the amount we Withdraw. While we do plan on spending a good amount on ourselves, we are more looking at these years doing more wealth transfer and non-profit giving, giving as much money as early and often as we can, when they are of highest value to recipients. Our plan is to "Die with Zero" with a reasonable safety margin leftover ( 5 years spending) and transfer as little as possible near the End of Plan vs earlier.

If you're still in Accumulation Phase, don't get hung up on the number so much. It's just a North Star for directional accuracy. It's going to be "a very big number", just focus your time now on improving the systems that will help you get there sooner - automate everything, reduce/eliminate all friction in having as much money as is tolerable shoved into Investing as soon as possible, and increase friction in the Spending side. Our household got to FI by never budgeting - we "anti-budgeted", which is far easier if you have self-discipline or are an inherent "Saver" We simply paid for our retirement immediately, then had targeted amounts of emergency and sinking funds saved for near-term needs, then fixed expenses paid, and the remainder was purely discretionary - just knowing whatever we spent on now took away from another thing/experience we could otherwise do, spending in line with values. It never was "hardship".

I stive for FIRE with 3% Safe Withdrawal Rate, but I know I'm super conservative and I also have only 45% of my portfolio in stocks - less than a typical FIRE portfolio. So for most people, I think wouldn't be afraid to go for 4% or maybe 3.5%, especially for those of you living in the US.

Keep in mind that the first years after reaching FI, when the sequence of return risk is the highest, is also the time when it's relatively easier to go back to work in case the market crashes, to earn some extra money and buy more stocks when they are cheap.

I think most are more likely to die than run out of money (how's that for an opening sentence to really set the mood)

Check out this calculator and look at the flex rates as your guardrails (ability to cut expenses by a % in bad conditions)

Rich, Broke or Dead? Post-Retirement FIRE Calculator: Visualizing Early Retirement Success and Longevity Risk - Engaging Data

A FI/RE early retirement calculator visualizing longevity risk in early retirement and enables you to compare the probability success, failure and mortality.

Engaging Data

I think you also need to back yourself that if you are in this community, who do things a bit fiffjrtto the norm and achieve financial independence, then surely you can work out how not to run out of money without sticking to some strick rule.

Here's my take: use the 25x / 4% rule of thumb as a starting point. Model out some assumptions regarding lifespan, expenses, social security, etc using any of the free or more advanced paid calculators, and go with what makes you feel comfortable in terms of success rate. Build some flexibility into your budget. Make sure when you're calculating your expense-based FI number, you're adjusting your expenses for inflation. For instance, $100k in expenses now will cost more if you're planning to reach FI in 10 years. Personally, from the modeling we've done, we're going for 28.57x projected expenses, which equates to a 3.5% SWR. There's a lot of talk in the community about oversaving and working too many years, etc, but it seems prudent to build some buffers into our plans. The future is unknown and unknowable.

People have been debating the 4% rule of thumb for as long as the FIRE community has existed.

Am I concerned for a US-based portfolio?... absolutely. CAPE10 is near all-time highs. Private Equity has learned to extract much more value from the stock market than any individuals can achieve. US company competitive advantages in computers, robotics, clean energy and biomedicine are being lost to Chinese companies. New tariffs are increased taxation on low and middle class. US international policy is generating hostility that will result in backlash to US business interests. I could go on-and-on.

The 20-year outlook for a US portfolio seems to be facing more headwinds than at any point since WWII. That said, in any predictions I know I've been wrong more often than right.

So what can one do? Remain flexible in capability and attitude. Getting to 25x of spending gives you all kinds of control and freedom. You can decide what to do when you get there. If you're happy with work and life then continuing for a few more x of spending wouldn't be a problem. Nor would changing work for a lower income more enjoyable or part-time job such that you might only need to do 1% or 2% withdraws while the portfolio grows or recovers from a downturn. Or working for one year out of every three or four for the next decade or so.

If I've learned anything it's the answer to the 25x vs 30x is very personal, and probably not even worth worrying about until your portfolio getting quite close.

This is really a discussion of risk mitigation. Under-spending and over-saving are two ways to mitigate risk. The downside of these is that you live more frugally than necessary and work more years than necessary. You probably also die with a lot of unspent money.

Another strategy is to design your portfolio to support a higher safe withdrawal rate. You don't mention the makeup of the portfolio where you would plan a 3.333% withdrawal rate. The makeup of a portfolio matters when talking about SWR because different portfolios support different SWR.

Tyler from Portfolio Charts does a great job in the below article demonstrating how the asset makeup of your portfolio matters for SWR. The classic 60/40 portfolio can support a 4% SWR. The Golden Ratio portfolio can support a 6% SWR.

Minimize Your Miss – Portfolio Charts

A good golfer doesn't blast every shot, and a good investor doesn't YOLO every choice. Minimize your miss, and the game is more rewarding.

Portfolio Charts

For those that are OK being more conservative, absolutely 3.2-3.4% for a 60-year+ time horizon. There's still a lot left on the table if you look at the full distribution; odds of the worst-of-the-worst are pretty low, so taking the tiniest additional chance can help a lot with getting out earlier.

For high earners that are at 70%+ savings rate, if the job isn't awful, an extra 8-24 months of padding isn't bad, either IMO partially since the freedom of having "that much extra" really counts for something.

Yes. See member/discussions/1174

It's important to contextualize the numbers appropriately. The person retiring at age 70 or 75 is in a vastly different position from the person retiring at age 40 or 45 (particularly as it pertains to opportunities to be able to generate income in the future). It is prudent for someone retiring at age 70 or 75 to plan as though there will not be opportunities to earn additional income in the future.

By age 80, the typical retiree is likely to be less physically capable (by a substantial margin) than 5 or 10 years prior. And even if they are still in excellent physical health, I suspect that they are much more likely to face serious age discrimination than someone who is 50 years old.

On the other hand, for a 40 or 45 year old, who is preparing to retire, to assume that there will never be another opportunity to earn a dollar seems rather an absurd proposition. To me, the "we need 30x or 33x instead of 25x" argument is mostly a red herring for this reason. I'm not saying, "be reckless and retire even if your financial situation isn't in order", but rather, "recognize that starting at age 40 or 45, 25x is just about as likely to lead to successful retirement as starting with 30x or 33x".

I just look at those numbers as benchmarks. If you’re at 25 times then you should relax and know that you are in a financially strong position. You have plenty of FU money. We have been coast FIRE for 20 years or so and was unaware of this until around 2016. I am 60 and wife 56. Wife works and I work 9 months out of the year. We want to help our 3 kids financially. That is a big reason why we still work. We have to take care of elderly parents, so retiring and traveling are not an option now.

I think of the 25 times or the 30 times or the 20 times as a starting point. Once someone gets somewhere into that region, a full financial plan looking at all of one’s goals asset allocation, housing, Social Securityetc. needs to be flashed out.

these are all just guidelines. Great ideas to keep you on track. You very well be right that 30x is right for you. From what Iv gathered from many of the FI type podcast is that those of us in the community tend to way overshoot our numbers.

For me this endeavor is about maximizing my time and being satisfied with my life when my time comes.

Check out risk based guardrails for drawdown: episode 566 ( I listened yesterday ) it’ll address what you’re talking about

You're going the wrong way. Bill Bengen's (who came up with the 4% rule) updated research stated that safe withdrawal is closer to 4.7% than 4%. It also accounted for full CPI inflation (which retirees are often CPI minus 1%) and figured a less than ideal portfolio. Add in guardrail withdrawal strategy and 4% gets closer to 6% even with a perpetual withdrawal (infinite years).

So no, not the 30x rule, more like 20x expenses (5% rule) and in reality you can probably get closer to 6%.