Not good at calculations and specifics of FIRE

[purple monkey]

For every dollar saved, how does that impact FIRE?

Does that mean I will have .04 for perpetual safe withdrawal for every dollar saved?

TIA

[Brilliantine]

Saved and invested. Yes.

[Retire-Canada]

For every dollar saved, how does that impact FIRE?

Does that mean I will have .04 for perpetual safe withdrawal for every dollar saved?

TIA

Not in a 100% way, but your chances are good that you could take 4% out forever. Using cFIREsim a 75/25 stocks/bond portfolio has an ~82% of success over 50yrs at 4% WR. That's pretty darn good. More than 50% of the time you end up with 2.5 times more money than you started with and those folks would be setup for 4% forever.

At the same time 18% of the simulation using historical data ran out of money before 50yrs was up.

I use the mental shorthand of 4% of my investments = my forever income, but I have a small, but important "in most cases" asterix in there as well.

[Retire-Canada]

Thank you.
So, does that mean that I could look at it like .03 on the dollar?

Yes, but in most cases that would be a gross underestimate for how much you could spend. So it comes down to if you need to shoot for absolute certainty or as close as is logical using historical data than you underestimate badly most of the time. If you use a more reasonable estimate you just have to be aware that it's a conservative estimate, but not locked-down 100%.

Personally I use 4% because of that. If I used 3% I'd be working extra years of my life to avoid a risk that is so small that I don't think it's a worthwhile trade off.

You also have to remember that you can fail at FIRE in ways that don't involve money or spreadsheets. I think working too long to hit an overly conservative FIRE $$ target is one of the ways to fail so I don't want to do that as I think it's a false sense of safety that overlooks other important risks.

[soccerluvof4]

And just remember all calcs are based on past performance since that's all we really have to go by.

[WildJager]

For every dollar saved, how does that impact FIRE?

Does that mean I will have .04 for perpetual safe withdrawal for every dollar saved?

TIA

Not in a 100% way, but your chances are good that you could take 4% out forever.

Well, I mean, technically you can 100% of the time.  ;)

But for the OP, the idea is that you should be able to take 4% of the initial stash and adjust that dollar value up for inflation every year.  In the past, 4% worked out for that most of the time.

[MoonLiteNite]

Super simple way of looking at it, yes.
For every 1$ you invest into the S&P500, for the rest of forever it SHOULD return at least 3 cents every year if you count up 30years of data.