Cross cohort question for those newly hiting FIRE numbers.

[mistymoney]

so the runup in stocks has been impressive. How many are jumping cohorts and moving their date much closer?

How many are wary of trusting this sharp increase, and plan to wait it out a little while past making the number? how much will you wait before acting on the increased stache amounts?

Reasons/Rationales for choice?

I am changing my mind near daily!

[MoneyTree]

I think it is perfectly legitimate to adjust your plans in light of changes in the situation, but the plan should include some means of handling sequence of returns risk. Pick your preferred method, whether it be a cash buffer, CD ladder, yield shield, bond tent, reverse equity glidepath, etc.

If you have sufficient provisions in place, I don't see why you wouldn't move up a FIRE date.

If you don't have these provisions in place, then I wouldn't pull the plug until they are there.

For me, as someone who has been nearly 100% stocks for the majority of my accumulation phase, I've been slowly increasing my bond position for the past year or so. I'm still not where I want to be in terms of my ideal FIRE asset allocation, so I won't pull the plug until I get there.

[nirodha]

Valuations matter. I think there's merit in planning with a dynamic withdrawal strategy. I am looking at a CAPE based rule:

https://earlyretirementnow.com/2017/08/30/the-ultimate-guide-to-safe-withdrawal-rates-part-18-flexibility-cape-based-rules/

For my circumstances, at current valuations, it is much closer to 3% than 4%.

[FarFetchd]

@nirodha thank you for posting that so that I didn't have to - I think like >50% of my posts on this forum have included that exact link, lol.

I'll add in https://earlyretirementnow.com/2017/12/13/the-ultimate-guide-to-safe-withdrawal-rates-part-22-endogenous-retirement-timing/, which is about exactly the situation we're currently in.

Interestingly, the findings there aren't nearly as bad as I would have intuitively expected. "Big equity run-up triggers a bunch of retirees, followed by an immediate drawdown; i.e. worst possible SoRR scenario; tragedy ensues" was my intuition. However, that article found only a <5 percentage point increase in failure probabilities for the 4% rule with this "endogenous" timing. An even smaller increase, though - like 1% - for 3.25% withdrawals. (Not to mention that the failure probabilities are low single digits for 3.25% vs >10 for 4%). So, as always, it is extremely reasonable to try to get people below 4%. I do, however, have to admit that the current conditions are not nearly as much of a "4% is significantly more dangerous than usual" situation than I thought.

As for the immediate personal question: I was already planning on the 2021 cohort by the end of 2019 or so (contingent on not ultimately deciding that I liked my job enough to just keep working despite FI). So, there's kind of a ceiling on how dramatic of a move-up was possible for me anyways. But, I'm now comfortable looking at retiring in the next month or so, where I probably would only have comfortable been near the end of the year without the run-up.

[Gardencat]

This is a great question. I’m on track to hit my number a year early, but as was mentioned above I’m not at my target allocation. I need another year to finish building my cash cushion. I’d also like another year of my employer’s health plan and retirement fund matching. It seems likely that I’ll have more than I planned in those retirement accounts than I figured, but that not a problem!

It seems likely that we’ll see a lot of volatility in the market until around the 4th quarter - depending on vaccine roll outs and effectiveness. I suspect in early 2022 we will be a a place that feels like a top.

[shuffler]

I'll add in https://earlyretirementnow.com/2017/12/13/the-ultimate-guide-to-safe-withdrawal-rates-part-22-endogenous-retirement-timing/, which is about exactly the situation we're currently in.

Interestingly, and locally, GerardC did that analysis on the forum just a bit before ERN posted his work up of it.  (See the post I linked and several replies before it in the thread.)

I like Gerard's examination, because it notes that one's savings rate while working factors into the results as well.
If one is a low-percentage saver, then the market moves have a larger swing in portfolio value, causing greater retirement-date clustering near peaks.
But if one is a high-percentage saver, the savings can dominate market performance (in the relatively shorter window until you hit 25x), thus spreading out the retirement dates.

[SwordGuy]

so the runup in stocks has been impressive. How many are jumping cohorts and moving their date much closer?

How many are wary of trusting this sharp increase, and plan to wait it out a little while past making the number? how much will you wait before acting on the increased stache amounts?

Reasons/Rationales for choice?

I am changing my mind near daily!

What sharp increase???

Seriously.

S&P500 is up 15.6% over the last year.   A smidge over 10% is the historical average.   So it's a bit above average year, but hardly a "sharp increase".

[nirodha]

An interesting extension of "valuations matter," is that I no longer feel confident in an absolute net worth as "my number". Rather, I am comparing expected spend vs. my valuation driven SWR. After chasing those big milestones for so long, this realization really blew my mind.

[Holocene]

so the runup in stocks has been impressive. How many are jumping cohorts and moving their date much closer?

How many are wary of trusting this sharp increase, and plan to wait it out a little while past making the number? how much will you wait before acting on the increased stache amounts?

Reasons/Rationales for choice?

I am changing my mind near daily!

What sharp increase???

Seriously.

S&P500 is up 15.6% over the last year.   A smidge over 10% is the historical average.   So it's a bit above average year, but hardly a "sharp increase".

Well maybe it feels sharper because there was a pretty large ~34% drop last spring?  Since that low point to today, S&P500 is up 69%.  The quickness of the recovery did surprise me.  We're still in the middle of a pandemic and many parts of the economy are still shut down or limited compared to pre-pandemic times (travel, in-person entertainment, sit-down restaurants, etc.).  That stocks are up by more than 15% in such a crazy year still amazes me.  You're not wrong in your assessment, but I also don't think people are wrong to feel like this was a "sharp increase" or to be worried about valuations now.  Especially for those of us who have mostly only experienced a stock market that goes up a lot and any downturns have been pretty short-lived (basically the market since 2009 or so).

As for the original question, my FIRE goal includes both a number and a date when I think I can get there.  My date is next year.  I'm within spitting distance of my FIRE number at this point.  I might have reached it by now, but we'll see when I check my assets in February.  I'm taking the opportunity to sell some more stocks and buy bonds to get a better asset allocation for FIRE.  I've definitely been stock heavy up until now and trying to get to at least 15-20% in bonds.

At the moment, I still plan to stick it out for the next year.  One, because valuations may be high right now and waiting should help with sequence of returns.  Two, because we're in the middle of a pandemic and there's not a ton to "retire to" at the moment.  Three, because this kind of snuck up on me and I still need to mentally prepare myself to quit working.  There are days when I wonder why the hell I'm still working.  And there are days I wonder what the hell I'm going to do for the rest of my life.  So I'm still trying to work through all that.

I'll have over 8 weeks of time off this year, including holidays.  So that should help a bit, along with knowing I can leave at any time if I start to get really miserable.  I don't hate my job.  There are even times when I've considered continuing on part-time (or at least asking to) after I'm FI.  There are things I will definitely miss about my job.  But then I remember all the corporate BS and other stuff I don't like and it's probably not worth it.  I think I'll likely be better off making a clean break and trying to find those things I like in other places, like volunteering.

[nirodha]

@Vapour are you planning on a bond tent strategy to mitigate the sequence of returns risk:

https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/

I like how it tests out in our current high CAPE environment, based on the work from ERN:

https://earlyretirementnow.com/2017/09/13/the-ultimate-guide-to-safe-withdrawal-rates-part-19-equity-glidepaths/

I cannot get my head around the idea of being 100% equities at the later stages of retirement, but I am looking to go from ~55% today, to 80%, over the next 10 years.

[scottish]

An interesting extension of "valuations matter," is that I no longer feel confident in an absolute net worth as "my number". Rather, I am comparing expected spend vs. my valuation driven SWR. After chasing those big milestones for so long, this realization really blew my mind.

I don't get it.    All the historical back testing doesn't explicitly take valuations into account.    Sometimes they're low and sometimes they're high.

Are you saying that you're reducing your SWR because P/E ratios seem high right now?     And how would you decide how much to reduce your SWR?

[nirodha]

@scottish

Historical back testing generally assumes an even distribution of retirement events. But, in practice, people chasing a magic number tend retire at high valuations, rather than low. The article linked by @FarFetchd explains why. This will be skewed based on how much of a retiree's portfolio growth is based on savings vs. gains, per the post @shuffler linked.

Retiring during a period of high valuation increases the chance of failure for a given SWR. Sequence of return risks are stacked against you, because the market will most likely revert to mean valuations. Our current valuations are extremely high - there are few comparable historical periods. Today's environment is even more challenging, in that bonds are also at historically low rates. So they don't have much room to appreciate. Oh, and the government is doubling down on MMT due to the pandemic and administration - printing lots of money.

The odds are in favor of us playing near (maybe even beyond) one of the back tested failure scenarios. These are roller coaster experiences to say the least, even if you don't ultimately fail. If you pick a strict % based withdrawal rate, actual withdrawal amounts are going to be highly volatile. They are also likely to drop strongly during your prime health years. If you pick a strict % of original balance, you hit some scary low net worth numbers. These risks are discussed in the article I linked to.

For me personally, smoothing this ride is very appealing. The article I linked to suggests a formula for doing so:

SWR = A + (1/CAPE) * B

So when valuations are high (CAPE) you withdraw a smaller percentage than when they are low. The factors of A and B to use depend on your personal scenario. Age, capital preservation needs, other expected income, etc. ERN provides a spreadsheet for estimating this yourself:

https://earlyretirementnow.com/2018/08/29/google-sheet-updates-swr-series-part-28/

What I really like about this, is when the next recession does come, I already have a strategy for how to react. I have a basis to increase my withdrawal rate %, keeping spending closer to my initial retirement levels. I also have selected a more conservative spend relative to my current portfolio value, since I am retiring into a high CAPE environment. Instead of being scared into continuing to work, because of a looming downturn, I can pick a number considering valuations that tests well.


Along a similar train of thought - tax planning strategy also substantially influences the value of the magic number. Let's say you have a million dollars and pick A=1.75, B=0.5. Today's SWR is roughly 3.25%. So $32,500 of annual spend. If you can hit 0% taxes, you get it all. Make other choices (say all your money is in your 401k) and end up paying 15% taxes, well now you can only spend $27,625. Two very different experiences from the same portfolio.


In practice, I think once a retiree gets close to pulling the trigger, they need to do this more careful analysis. Alternatively, they can pick a very conservative spend and over-save. But that is more time working.

[Bloop Bloop Reloaded]

I only account for dividend/rental income so any appreciation in shares doesn't change my FIRE plans at all.

I'm not comfortable withdrawing principal, that's why.

[jpdx]

As I get closer to FIRE, I'm realizing for the first time that I am not ready to stop working.

[Holocene]

@Vapour are you planning on a bond tent strategy to mitigate the sequence of returns risk:

https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/

I like how it tests out in our current high CAPE environment, based on the work from ERN:

https://earlyretirementnow.com/2017/09/13/the-ultimate-guide-to-safe-withdrawal-rates-part-19-equity-glidepaths/

I cannot get my head around the idea of being 100% equities at the later stages of retirement, but I am looking to go from ~55% today, to 80%, over the next 10 years.

I've been struggling to figure out what my allocation and withdrawal strategy should be in FIRE.  I've read a little about bond tents and rising equity glidepaths.  But I can't help but think now is a terrible time to go bond heavy.  I can't get my head around being 40-60% in bonds today.  Yields suck.  If yields rise, bond prices will go down.  And there's not a ton of room for yields to go down any more, so it feels like bonds are lose-lose right now.  There's just a lot more upside to stocks and I feel more comfortable being fairly stock heavy even to start retirement.  So I'm thinking of just going with ~20% bonds to start.  If the stocks drop, I'll pull from bonds.  If stocks go up, I'll pull from stocks.  I should still last at least 5 years or so pulling strictly from bonds if needed, which should get me out of most recessions.  Then I'd allocate more stocks to bonds after stocks have recovered.  I do need a more concrete strategy, but those are my initial thoughts.  I also have lots of backup plans so I'm not too terribly worried about the money side.  I'm more struggling with the mental/emotional side at the moment.

[American GenX]

I've exceeded a target stash that I needed, but it's none of the above reasons in the OP or as others gave.

I'm waiting for a final ruling on the ACA before making definitive plans exactly when to FIRE.  I know things sounded favorable after oral arguments, but I'm not taking any chances until I can be 100% certain what they decide.

[asauer]

I've exceeded a target stash that I needed, but it's none of the above reasons in the OP or as others gave.

I'm waiting for a final ruling on the ACA before making definitive plans exactly when to FIRE.  I know things sounded favorable after oral arguments, but I'm not taking any chances until I can be 100% certain what they decide.

Same, depending on what happens with ACA, I can either pull the trigger this August or if not, have to wait until the following June.

[nirodha]

@Vapour - I can relate. I built up my bond position over the last year, thinking any changes will be slow moving and allow reaction. I don't necessarily need bonds to do well, just to avoid moving entirely correlated with stocks.

I am still 20% cash. I do not have any assets that make me feel enthusiastic. Maybe my paid off home, because it lets me keep income low and avoid taxes. But on the other hand, if we hit a period of strong inflation, maybe some debt would be nice.

My emotional response to the markets caused behavior matching the first half of the bond tent, so when I read about it, it seemed like a good fit.


Have you looked at the prime harvesting approach:

https://earlyretirementnow.com/2017/04/19/the-ultimate-guide-to-safe-withdrawal-rates-part-13-dynamic-stock-bond-allocation-through-prime-harvesting/

It is similar to your strategy, but maybe puts more though around the implications of a reversion to mean.


There's a good chance my need for security leads to a significant underspend relative to my SWR. I am trying to avoid that with a solid plan. Tanking my quality of life out of fear is a very real risk.


@Bloop Bloop Reloaded  - I wish I had the mindset for real estate investing. It is work, but in some ways much more reliable. Have you looked at the concept of a yield shield strategy to investing?

https://earlyretirementnow.com/2019/02/13/yield-illusion-swr-series-part-29/

It looks similar to what you might be doing, only withdrawing dividends. Planning to count on some capital gains might be more robust.

[FIRE 20/20]

Before I FIREd in 2019, I read through BigERN's Safe Withdrawal Rate series a couple of times.  I think he did excellent work and made a really valuable contribution to the FIRE community.  However, if I remember correctly (it's been almost 2 years) I think he ignored or dismissed the fact that CAPE now is nothing like CAPE from before, particularly between pre- and post- 2001.  The changes to Generally Accepted Accounting Principles (GAAP) dramatically changed the definition of "Earnings".  Since CAPE is the 10-year average for the Price to Earnings ratio, if you change the definition of Earnings then you can't just compare today's CAPE to CAPE from prior times.  From my viewpoint, that totally invalidates most of the CAPE-based charts and data Big ERN posted even if I agree with most of his thought process and his general conclusions.  If someone is more familiar with his work and can point to where he adjusted CAPE to account for that difference I'd be happy to be shown to be incorrect. 

To the OP's questions, I'll provide my answers from when I was approaching FIRE in April of 2019.  The environment was similar - high CAPE (31 then, 33 now), runups in the markets (20% increase from December 2018 - April 2019), and concerns about an impending crash.  I just executed the plan I had all along and didn't change anything.  My plan was to hit 25x of my planned FIRE expenses and then work 1 extra year.  I figured that was essentially the same as FIREing with a 25x, but then having zero spending for the first 3 years of FIRE since my income during that year covered that year's expenses plus 2 more years' expenses.  I also ignored S.S. and my pension, and I had plenty of fat to cut from my planned spending.  I figured that with all of those buffers I could ignore the high valuations.  I'm now somewhere around a 3% withdrawal rate after the market increases we've seen since I FIREd and I'm also spending less than planned. 

I think that any robust FIRE plan needs to account for a huge drop in the markets and/or high inflation.  There are lots of ways to do that, from side hustles to planned cuts to spending to low withdrawal rates to ignoring pensions and S.S.  I find it almost impossible to believe that anyone would be smart and capable enough to successfully execute a plan to FIRE with a 4% withdrawal rate and have absolutely zero plan to deal with the chance that might fail. 

[nirodha]

@FIRE 20/20 - Your criticism is very fair. I don't recall ERN treating the problem of CAPE drift via a model. I did run across this comment:

https://earlyretirementnow.com/2017/08/30/the-ultimate-guide-to-safe-withdrawal-rates-part-18-flexibility-cape-based-rules/comment-page-2/#comment-19385

I certainly do a mental adjustment for the CAPE. A 25 today is not quite as scary as 50 years ago. Good point. But 30 still seems excessive. Not sure we will return to 30 anytime soon, which makes me think that the recovery from this event will take a lot longer than some expect.

I loosely consider this examining factors for the dynamic withdrawal rule. I am convinced current valuations are high. I will freely admit - I don't understand how those valuations unwind. What if the value of a dollar goes down, so nominal returns on stocks still look good? Better not dump all my stocks today. For me - these are rough gambles, using a rough metric. I do better mentally, when my plan has some built in monitoring and controls.


I think it's interesting to consider your situation - essentially retiring with 28x spend saved, similar to a flat 3.5% SWR. Taking a wild guess - it's probable your ignored SS and pension are worth at least 25 basis points of SWR. That gives a plan of roughly 3.25% SWR, which never fails in back testing. Now you are running below even that conservative metric. I am prone to this perspective as well. I'd be stoked to find myself with a 2% SWR, while I'm spending retirement eating lentils and darning socks.


I am trying find confidence from modeling. Understanding the withdrawal strategies may overcome my hyper-conservative nature. The lived experience of a 3% SWR instead of 3.5%, means saying no to 18% more consumption. While it might not be missed, it is a loss of possible quality of life. As much as I fear running out of money, missing out to die rich, seems worse.

One more year is especially insidious, because we burn prime health, for security while infirm. I am guilty, and I am not convinced it was a great deal.

[Holocene]

@Vapour - I can relate. I built up my bond position over the last year, thinking any changes will be slow moving and allow reaction. I don't necessarily need bonds to do well, just to avoid moving entirely correlated with stocks.

I am still 20% cash. I do not have any assets that make me feel enthusiastic. Maybe my paid off home, because it lets me keep income low and avoid taxes. But on the other hand, if we hit a period of strong inflation, maybe some debt would be nice.

My emotional response to the markets caused behavior matching the first half of the bond tent, so when I read about it, it seemed like a good fit.

Have you looked at the prime harvesting approach:

https://earlyretirementnow.com/2017/04/19/the-ultimate-guide-to-safe-withdrawal-rates-part-13-dynamic-stock-bond-allocation-through-prime-harvesting/

It is similar to your strategy, but maybe puts more though around the implications of a reversion to mean.

There's a good chance my need for security leads to a significant underspend relative to my SWR. I am trying to avoid that with a solid plan. Tanking my quality of life out of fear is a very real risk.

I hadn't read that article so thanks for the link!  I skimmed through it and it does look like what my initial thoughts are for withdrawals.  I need to read through it a little more thoroughly.  Maybe that'll help me come up with a concrete plan.  I should really read through the whole ERN SWR series someday.  I've read bits and pieces here and there as they were relevant to something I was looking into.  I decided on ~3.5% WR, mainly based on how the numbers looked in FIREcalc.  This gives me around 95% success rate.  It seemed like a good compromise between going to a super low WR to get to 100% success, and going for a higher WR and taking more risk.  But now that I'm getting closer to actually retiring, I need to figure out a real strategy for asset allocation and withdrawals.

I also try to be conservative in my spending estimates, but healthcare is the big unknown.  I tried to plan my budget so I don't need ACA subsidies, but insurance rates are pretty unpredictable and I have no idea what costs would be for me when I'm 64 and not quite on Medicare yet.  I should be eligible for healthcare subsidies as long as they're around, I just don't want to count on them.  I think the ACA is pretty ingrained in our lives now and like SS and Medicare, you won't be able to take it away without hurting a huge swath of people.  Which I would say is political suicide, but with the current political environment I'm not so sure anymore.

I hope I'm being too conservative and I end up with a huge bucket of money to donate to charity.  I do think that is the more likely outcome at this point.  But if we enter a terrible depression worse than we've ever seen before, I might just have to cut some expenses or even go back to work.  I'm willing to live with taking that chance.

[FIRE 20/20]

I think it's interesting to consider your situation - essentially retiring with 28x spend saved, similar to a flat 3.5% SWR. Taking a wild guess - it's probable your ignored SS and pension are worth at least 25 basis points of SWR. That gives a plan of roughly 3.25% SWR, which never fails in back testing. Now you are running below even that conservative metric. I am prone to this perspective as well. I'd be stoked to find myself with a 2% SWR, while I'm spending retirement eating lentils and darning socks.

Your assessment is correct, but I intentionally didn't thihttps://forum.mrmoneymustache.com/Themes/default/images/bbc/table.gifnk of it that way.  I didn't want to just have a new target of 3.5% withdrawal.  My goal really was 25x plus a year - regardless of what happened.  If after that extra year I was down to 20x expenses for a 5% withdrawal rate the plan still said to FIRE.  I don't know if I would have had the guts to do it, but that was the plan.  It turned out that I was actually over 30x because of contributions plus growth when I FIREd but I didn't consider the withdrawal rate as relevant.  I was trusting that hitting 25x and working an extra year was sufficient to eliminate any risks other than true black swan events. 

One of the most interesting things about my experience of 18 months of FIRE is that I went from a very worried FIRE planner who consumed everything he could about SoRR, CAPE, the nature of the historic failures, etc. to completely relaxed post-FIRE.  Certainly some of it is market growth, but I don't think it's very much.  I FIREd in late April 2018, and in May we had a minor drop - about 7% - and I wasn't worried at all even though we had no way to know it was just a blip while it was happening.  I also didn't worry at all during the drop in February and March of last year.  If you would have asked pre-FIRE me how I would respond to a global pandemic resulting in the drop we saw during those months I would have freaked out, but in reality it wasn't even a slight concern.  FIREd life has been so much better than I expected and having back-up plan on top of back-up plan on top of back-up plan are the main reasons.  I'll give one example that ties the two together.  My partner and I have certain triggers in place where if our 'stache hits a certain level we'll begin some pre-planned cuts that we both agreed to.  She gives up a few things, I give up a few things, and we're both ok with cutting those "extras" for a few years.  And since we've confirmed that we both love spending time at home together during the pandemic cutting those extras won't impact the things that actually make our lives worth living.  There are other plans in place, but as horrible as so much of 2020 was it had a silver lining for me that I found that even a bare-bones FIRE'd life at home is much better than working longer.  And I had a great, low-stress, well-paying job with good co-workers and management. 

I am trying find confidence from modeling. Understanding the withdrawal strategies may overcome my hyper-conservative nature. The lived experience of a 3% SWR instead of 3.5%, means saying no to 18% more consumption. While it might not be missed, it is a loss of possible quality of life. As much as I fear running out of money, missing out to die rich, seems worse.

I think there's a limit to how much confidence you can get from modeling.  I would think about how much confidence you have in your plan if things go wrong.  I mentioned a few things that are in my plan - triggers and agreed to cuts in spending and ignoring S.S. and our pensions are a couple - but there are others.  Short of societal collapse, I'm very confident we'll make it through whatever happens.  And if societal collapse does take us out at least we had some healthy FIREd years before it happened. 

[FarFetchd]

One of the most interesting things about my experience of 18 months of FIRE is that I went from a very worried FIRE planner who consumed everything he could about SoRR, CAPE, the nature of the historic failures, etc. to completely relaxed post-FIRE.

...

Great post. Thanks very much! An anecdata point on pre-vs-post-FIRE psychology around withdrawal math is definitely of interest to us almost-theres, and your experience is certainly good news. Actually, I hadn't thought about "how much will I continue to obsess over SWR stuff" until now, but I'm realizing you kind of *have* to make the sort of shift you did, or else you are throwing away some non-trivial chunk of quality of life on pure neurosis.

For myself, I'm going to try to go with the idea of packaging complexity into a simple modular solution: "I know how carefully I considered everything, and the fact that I was willing to go through with FIRE means I must be pretty confident in my conclusions. Therefore I will treat the formulas in my spreadsheet as a correct finished product whose internals I don't need to think about, barring some crazy once in a century disaster."

[nirodha]

My last day is in a week, so I am probably at peak neurosis. It's hard to imagine treating the plan as a finished product, but I'd definitely like to be there.

Circling back to the OP's - high net worth from the market run up definitely factored into my pulling the trigger. I wouldn't have started the additional analysis, had I not seen numbers running up. My perspective changed in the process, and it sounds like it will change again.

[Holocene]

@nirodha - Congrats!  I think it's awesome that you're taking the leap despite some of your fears.  As much as we analyze the numbers and make endless plans, I think the reality is that we'll make it work with what we're given.  If you've been smart and dedicated enough to retire early, you'll be smart and dedicated enough to make it work in retirement, no matter what the market brings you.  I wish you the best!

[Sandi_k]

Aside from ERN's articles, the Bogleheads also have Variable Percentage Withdrawal - including a pretty easy chart. Worth reading up on, IMO.

https://www.bogleheads.org/wiki/Variable_percentage_withdrawal

[djadziadax]

We have exceeded our FIRE number by two years - we were originally planning on 2022, and at the moment we are sitting on a number exceeding original expectation by 10%. We have started to talk about what to do, but have come to the conclusion that we will not going to pull our date forward, as it is conceivable that in even 1 more year we will be at 30% above our goal which is pretty amazing. All of that was due to the unexpected success of a moonshot investment (only one outside of ETF) - a company that made some opportunistic moves during COVID.

In addition, we are still working from home, with a much more relaxed pace (we allow ourselves to take naps!!) so hanging around for another year or two will not be that burdensome and will be in line with our original projections.

This additional year will also allow us think through options for post retirement - especially in light possibility of being FAT FI.

But this market performance has given us a lot more flexibility in our attitude towards work (the above mentioned naps) and has allowed us to think even more broadly what we can do with a FAT FI.

Also, if we are sitting at at 30-40% above goal, sequence of returns risk is quite minimized as we will be able to tolerate a significant drop in the market without crimping on our budget.

All of that is to us worth sticking to our original timing.

[djadziadax]

I think that any robust FIRE plan needs to account for a huge drop in the markets and/or high inflation.
 

This is so important, and it is lost in most discussion because inflation has not been above 3%. But in today's multi trillion stimulus environment this becomes much more relevant planning strategy.

This is one reason I am not paying off our mortgage. But what other assets in this environment could be a good inflation hedges for say 5-7% inflation (just speculating)?