Did the Great Resignation class of 21-22 just pick the worst time to retire?

[ATtiny85]

I assume the rest of the ~4% that couple is withdrawing is hidden as an advisor fee.

[maizefolk]

That paper has the same problem as the vast majority to attempt to calculate a SWR using global data: By incorporating country specific data that is heavily weighted towards Europe, the main part of the world outside the USA that has stock and bond market data going back more than a century, the paper is trying to design a withdrawal rate that can tolerate a world war that destroys your country's infrastructure (near zeroing out the the value of stocks), overthrows or bankrupts your country's government (near zeroing out the value of government bonds), and kills off a substantial fraction of a whole generation of young people (creating a drag on economic growth for a generation), all without asking you to change your lifestyle one iota.

Looking at other versions of the analysis with similar datasets, the failures almost entirely occur in World Wars I and II in countries that experienced substantial on the ground combat and often were invaded and occupied by a foreign power. Plus the spanish civil war.

Being able to live through a world war being fought outside your door without changing your lifestyle is a much tougher ask and inherently is going to have an extremely low SWR. My view is that having a world war fought outside my door would be a major disruption in my life whether or not I was retired, so I'm not going to hold off on FIRE until I'm so rich that I wouldn't be inconvenienced by an on the ground war in the place that I lived.

[clifp]

Looking at other versions of the analysis with similar datasets, the failures almost entirely occur in World Wars I and II in countries that experienced substantial on the ground combat and often were invaded and occupied by a foreign power. Plus the spanish civil war.

Being able to live through a world war being fought outside your door without changing your lifestyle is a much tougher ask and inherently is going to have an extremely low SWR. My view is that having a world war fought outside my door would be a major disruption in my life whether or not I was retired, so I'm not going to hold off on FIRE until I'm so rich that I wouldn't be inconvenienced by an on the ground war in the place that I lived.

I generally agree, if there is major combat in my city again (it happened on Dec 7, 1941) worrying about how much money I'll have when I'm 85 is going to be low on my list of concerns.
That said, the US stock market has been uncommonly good for investors, especially in the last 25 year or so. So assuming some revision to the mean for the US vs all stock market isn't crazy.

[maizefolk]

clifp, I agree, the last 15 years or so have been quite good ones to be an early retiree (before that we have close to a decade when the stock market traded sideways). But keep in mind something like the 4% rule doesn't look at average returns but at the worst time intervals in the dataset.

So even with the great run of 2008-2021 returns within the USA stock market time series, if folks are building an investment thesis around US stock market returns they are essentially building a portfolio to survive scenarios up to ones as bad as the stagflation of the 1970s and the economic collapse of the great depression. Both of which were quite bad, but not cities being leveled by combat bad.

[Metalcat]

Looking at other versions of the analysis with similar datasets, the failures almost entirely occur in World Wars I and II in countries that experienced substantial on the ground combat and often were invaded and occupied by a foreign power. Plus the spanish civil war.

Being able to live through a world war being fought outside your door without changing your lifestyle is a much tougher ask and inherently is going to have an extremely low SWR. My view is that having a world war fought outside my door would be a major disruption in my life whether or not I was retired, so I'm not going to hold off on FIRE until I'm so rich that I wouldn't be inconvenienced by an on the ground war in the place that I lived.

I generally agree, if there is major combat in my city again (it happened on Dec 7, 1941) worrying about how much money I'll have when I'm 85 is going to be low on my list of concerns.
That said, the US stock market has been uncommonly good for investors, especially in the last 25 year or so. So assuming some revision to the mean for the US vs all stock market isn't crazy.

Fair, but the 4% rule isn't based off of unusually high US market returns of the last 25 years, so wouldn't that be baked in? Feel free to correct me.

[nereo]

clifp, I agree, the last 15 years or so have been quite good ones to be an early retiree (before that we have close to a decade when the stock market traded sideways). But keep in mind something like the 4% rule doesn't look at average returns but at the worst time intervals in the dataset.

So even with the great run of 2008-2021 returns within the USA stock market time series, if folks are building an investment thesis around US stock market returns they are essentially building a portfolio to survive scenarios up to ones as bad as the stagflation of the 1970s and the economic collapse of the great depression. Both of which were quite bad, but not cities being leveled by combat bad.

All of which can bring us around to a reality that’s often overlooked when a person goes deep into the weeds of the “4% rule” and historical scenarios and trying to read the macroeconomic tea-leaves of whether the next half-century will have periods which are much worse than any from the previous century (i.e. this thread):  the power of additional savings rapidly diminishes.

Once you have enough savings to cover a ‘typical’ retirement period (say 25x expenses), more money isn’t the best defense against external threats. Instead, lots of other things can have a much larger impact on ensuring a comfortable retirement - we’ve broadly described a few of these as “layers of safety”. Some of these are passive but require advanced planning, like mitigating infllation, being properly insured, and limiting legal liabilities. Others require varying degrees of active involvement, like a side gig, maintaining certifications and geoarbitrage.

The biggest threats to an otherwise large and healthy retirement account aren’t likely to be sub-standard market returns, but external events that aren’t accounted for in things like FireSIM.  Divorce, war, natural disasters, lawsuits, theft, severe medical ailments, extreme political  - all can turn a happy retirement into a nightmare.  Thankfully most can be moderated to some degree and with the same strategies, and ironically “more money” is rarely the best defense.

It will be several more years before we get a true sense of whether 21-22 was “the worst time to retire” or simply a gut-wrenching, suboptimal time. But among the FIREes with typically solid portfolios, I’d wager more true failures will come from these other events than from SORR.

[Arbitrage]

clifp, I agree, the last 15 years or so have been quite good ones to be an early retiree (before that we have close to a decade when the stock market traded sideways). But keep in mind something like the 4% rule doesn't look at average returns but at the worst time intervals in the dataset.

So even with the great run of 2008-2021 returns within the USA stock market time series, if folks are building an investment thesis around US stock market returns they are essentially building a portfolio to survive scenarios up to ones as bad as the stagflation of the 1970s and the economic collapse of the great depression. Both of which were quite bad, but not cities being leveled by combat bad.

I think it bears pointing out that a US-based investor doesn't need a single share of stock to do better than the projections quoted here from that article.  A 65-year old who does nothing but keep up with inflation can make it to 95 with a 3.3% WR.  You could build a 30-year TIPS ladder today that averages over 1.5% real, pushing that to zero failure over an even longer timespan  (absent the dissolution of the US gov't or similar, which really falls outside of the bounds of personal finance modeling).  Claiming a 2.26% SWR is required for 65-year-olds is downright harmful to people trying to save for retirement.

[maizefolk]

clifp, I agree, the last 15 years or so have been quite good ones to be an early retiree (before that we have close to a decade when the stock market traded sideways). But keep in mind something like the 4% rule doesn't look at average returns but at the worst time intervals in the dataset.

So even with the great run of 2008-2021 returns within the USA stock market time series, if folks are building an investment thesis around US stock market returns they are essentially building a portfolio to survive scenarios up to ones as bad as the stagflation of the 1970s and the economic collapse of the great depression. Both of which were quite bad, but not cities being leveled by combat bad.

I think it bears pointing out that a US-based investor doesn't need a single share of stock to do better than the projections quoted here from that article.  A 65-year old who does nothing but keep up with inflation can make it to 95 with a 3.3% WR.  You could build a 30-year TIPS ladder today that averages over 1.5% real, pushing that to zero failure over an even longer timespan (absent the dissolution of the US gov't or similar, which really falls outside of the bounds of personal finance modeling).  Claiming a 2.26% SWR is required for 65-year-olds is downright harmful to people trying to save for retirement.

I agree with your bolded point, which is what I think gets lost when people incorporate historical investment return data from non-USA countries like France (20th century saw the dissolution of the 3rd French republic, then the Vichy regime, and then the 4th French republic) and Germany (20th century saw the Germany monarchy end in revolution, then the dissolution of the Weimar republic, then the overthrow the of nazi regime) without thinking about the history that investment return data corresponds to.

The 20th century saw Germany go through the gold mark (ended when the german empire needed to fund the first world war), the papiermark (ended in hyperinflation), the rentenmark (more hyperinflation), the reichsmark (declined 10x in value at the end of the war), the deutch mark (which overall worked well for half a century) and the euro (worked well in the 20th century, may end up causing the german economy some big problems in the 21st). That's five currency swaps, four of which caused serious harm to savers in only a century.

France didn't have as many explicit changes of currency although they did have the nouveau franc where they dropped two zeros off the currency. But over the 20th century when the value of the USD declined 17x, the orginal french franc saw its own value decline by something like 9,300x.

[rantk81]

well, the bold'ed party came very scarily close, a little over a year and a half ago....

[Metalcat]

well, the bold'ed party came very scarily close, a little over a year and a half ago....

I'm curious, did they really?

Like, did they actually have the ability to topple the entire governance system of the US?

Not a facetious question, I'm legitimately curious, because up here in Canada we've had someone rampage and shoot up parliament and just had a long siege of parliament and at no point was anyone ever worried about an attack on parliament actually collapsing our government...except for the delusional folks doing it who don't actually understand governance, of course.

So is the US system actually that fragile?

Serious question.

[GuitarStv]

well, the bold'ed party came very scarily close, a little over a year and a half ago....

I'm curious, did they really?

Like, did they actually have the ability to topple the entire governance system of the US?

Not a facetious question, I'm legitimately curious, because up here in Canada we've had someone rampage and shoot up parliament and just had a long siege of parliament and at no point was anyone ever worried about an attack on parliament actually collapsing our government...except for the delusional folks doing it who don't actually understand governance, of course.

So is the US system actually that fragile?

Serious question.

The insurrectionists who broke into the capitol and put so many police officers in hospital weren't a serious threat to US democracy.  Donald Trump's actions to try to subvert election proceedings were more concerning.  Especially given the number of Republicans and Republican candidates who are publicly claiming to believe them and are in a position to facilitate a worse outcome next time.

[By the River]

well, the bold'ed party came very scarily close, a little over a year and a half ago....

I'm curious, did they really?

Like, did they actually have the ability to topple the entire governance system of the US?

Not a facetious question, I'm legitimately curious, because up here in Canada we've had someone rampage and shoot up parliament and just had a long siege of parliament and at no point was anyone ever worried about an attack on parliament actually collapsing our government...except for the delusional folks doing it who don't actually understand governance, of course.

So is the US system actually that fragile?

Serious question.

No.  Just in the last 50 years, the US has withstood the 9/11 attacks, plus 2 bombings of the Capital building, other bombings at the US Department of State, the National War College, the Navy Yard Computer Center and its Officers Club and the Pentagon among others. As well as an attempted assassination of the President plus other lawmakers.  I liken it more to the efforts to disrupt the Kavanaugh confirmation hearings on a much larger but similarly futile scale.  (Note: I'm just listing these, not agreeing with any)
 

[AlanStache]

During Obamas first swearing in ceremony the official misread a few words and they ended up redoing the ceremony latter on to head off any challenge that he was not swore in correctly and therefor not really the president.

I dont think jan 6 could have resulted in Trump being president today, but things could have been a lot messier, if he refused to leave the white house.  with maybe bidden taking up the office elsewhere.  given the kid gloves used on the TS documents I dont see him being physically removed from the white house. 

[nereo]

well, the bold'ed party came very scarily close, a little over a year and a half ago....

I'm curious, did they really?

Like, did they actually have the ability to topple the entire governance system of the US?

Not a facetious question, I'm legitimately curious, because up here in Canada we've had someone rampage and shoot up parliament and just had a long siege of parliament and at no point was anyone ever worried about an attack on parliament actually collapsing our government...except for the delusional folks doing it who don't actually understand governance, of course.

So is the US system actually that fragile?

Serious question.

The insurrectionists who broke into the capitol and put so many police officers in hospital weren't a serious threat to US democracy.  Donald Trump's actions to try to subvert election proceedings were more concerning.  Especially given the number of Republicans and Republican candidates who are publicly claiming to believe them and are in a position to facilitate a worse outcome next time.

This is my interpretation as well.  with the exception of a few dozen paramilitary types (e.g. stewart rhodes and his minions), those who stormed the capitol seem mostly to have been a threat to people on the ground, but not to democracy itself. See how rapidly the senate reconvened to certify the election once the insurrection was put down.  But there was a coordinated, multi-pronged effort to subvert democracy led by Trump and followed by literally dozens of high-ranking individuals which frankly got far more penetration than I thought possible.  Remarkably it was attack on almost every level, from local voting precincts to state legislatures and at every level of the judicial system. Yet democracy held (for now). Enough people in positions of power refused to carry out the demands of the then president and commander in chief that the office of the President was transferred to Biden, as the election dictated.

what concerns me now is how the system has changed since then, and how a large percentage of people now believe the myth that there is 'widespread voter fraud'.  As soon as a large segment of the population stops trusting the result of vote counts the whole idea of a representative government goes out the window. 

[GuitarStv]

what concerns me now is how the system has changed since then, and how a large percentage of people now believe the myth that there is 'widespread voter fraud'.  As soon as a large segment of the population stops trusting the result of vote counts the whole idea of a representative government goes out the window.

This is exactly my concern.  Those of us who live in America's hat are uncomfortable with the idea of the US abandoning democracy.  Trump's anti-democratic actions after losing the election got him much more traction than they should have, and currently the US is in weaker place to resist the next time it happens.

[AlanStache]

...
This is exactly my concern.  Those of us who live in America's hat are uncomfortable with the idea of the US abandoning democracy.  Trump's anti-democratic actions after losing the election got him much more traction than they should have, and currently the US is in weaker place to resist the next time it happens.

TFTFY

Pre-first election he did not promise to concede if he lost. 

[clifp]

Fair, but the 4% rule isn't based off of unusually high US market returns of the last 25 years, so wouldn't that be baked in? Feel free to correct me.

The world is constantly changing, and the rate of change is arguable increasing not decreasing.  It is certainly comforting to say that based on 150 years of stock and bond returns, the two worse periods are the Great Depression and stagflation of 1970s, and my 40 or 50+ year retirement isn't going to have 30 year period worse than those two periods.  But is it true?

I'm by nature an optimist, but living through the Covid (so far) and Trump presidency I'm less so.  We face some unique challenges, the threats to our democracy, and climate change are two that previous generations have not faced since 1861 and never.

I bring up the last 25 years because capital returns have been unusually good.  We also see increasing pressure for labor to get more of the pie, and inequality to be reduced.  Now while this is far from unique in American history, I see increasing support for this, including by myself.  I used to be the rare guy on forum, who was so staunchly laisse-fair capitalism, that I'd defend oil and drug companies.  But even I and many of my wealthy friends don't oppose higher taxes on rich folks/corporations,  government regulation of dominant companies, and some wealth distribution as vehemently as we used to.   Simply put giving more of the pie to the have nots, probably means less to the haves.  So the next 25 years may look particularly bad for investors.

I'm quite sure that the past 25-year financial returns are more relevant to the next 25 years than what happened back in the Great Depression.  My biggest objection to FireCalc and similar tools is that  I don't think there should be equal weight to all time periods.

[AlanStache]

Also remember that we (or at-least the central bankers) have been and will continue to study history with what did and did not work in past.  Yes black swans can happen but that is what contingency pains and cash reserves are for.  “'It's tough to make predictions, especially about the future'”

[Metalcat]

Fair, but the 4% rule isn't based off of unusually high US market returns of the last 25 years, so wouldn't that be baked in? Feel free to correct me.

The world is constantly changing, and the rate of change is arguable increasing not decreasing.  It is certainly comforting to say that based on 150 years of stock and bond returns, the two worse periods are the Great Depression and stagflation of 1970s, and my 40 or 50+ year retirement isn't going to have 30 year period worse than those two periods.  But is it true?

I'm by nature an optimist, but living through the Covid (so far) and Trump presidency I'm less so.  We face some unique challenges, the threats to our democracy, and climate change are two that previous generations have not faced since 1861 and never.

I bring up the last 25 years because capital returns have been unusually good.  We also see increasing pressure for labor to get more of the pie, and inequality to be reduced.  Now while this is far from unique in American history, I see increasing support for this, including by myself.  I used to be the rare guy on forum, who was so staunchly laisse-fair capitalism, that I'd defend oil and drug companies.  But even I and many of my wealthy friends don't oppose higher taxes on rich folks/corporations,  government regulation of dominant companies, and some wealth distribution as vehemently as we used to.   Simply put giving more of the pie to the have nots, probably means less to the haves.  So the next 25 years may look particularly bad for investors.

I'm quite sure that the past 25-year financial returns are more relevant to the next 25 years than what happened back in the Great Depression.  My biggest objection to FireCalc and similar tools is that  I don't think there should be equal weight to all time periods.

Neat take. I appreciated this.

So how do plan for a future that you don't think reflects the past?

I'm not being facetious, if you read this contentious thread you might note I'm depending on flexible income for my future security, not depending on the 4% rule*.

But how do you plan for an investments-based financial future when you project fundamental changes to the economy?

Although, I also have to ask, is the market behaviour in the US fundamentally different from the market behaviour of countries that have more even wealth distribution? Or is that irrelevant because the US market dictates so much of what happens in those other markets? Meaning, the markets of more socialist countries don't take a hit because they're mostly representing what's happening in the broader, unequal markets?

Not an expert on economics, at all, so these might be stupid questions.

*I personally take the 4% rule with a grain of salt because the assumptions are nonsense and it uses made up numbers. At best someone's "anticipated future annual spend" is a very rough estimate based mostly on guesses and feelings, and the calculation presumes that it stays exactly the same plus an exact estimated increase for inflation year over year, which isn't probable.

There's too much noise in the assumptions to get such granular meaningful data differentiating between half a percentage point in withdrawal rates.

[wageslave23]

Fair, but the 4% rule isn't based off of unusually high US market returns of the last 25 years, so wouldn't that be baked in? Feel free to correct me.

The world is constantly changing, and the rate of change is arguable increasing not decreasing.  It is certainly comforting to say that based on 150 years of stock and bond returns, the two worse periods are the Great Depression and stagflation of 1970s, and my 40 or 50+ year retirement isn't going to have 30 year period worse than those two periods.  But is it true?

I'm by nature an optimist, but living through the Covid (so far) and Trump presidency I'm less so.  We face some unique challenges, the threats to our democracy, and climate change are two that previous generations have not faced since 1861 and never.

I bring up the last 25 years because capital returns have been unusually good.  We also see increasing pressure for labor to get more of the pie, and inequality to be reduced.  Now while this is far from unique in American history, I see increasing support for this, including by myself.  I used to be the rare guy on forum, who was so staunchly laisse-fair capitalism, that I'd defend oil and drug companies.  But even I and many of my wealthy friends don't oppose higher taxes on rich folks/corporations,  government regulation of dominant companies, and some wealth distribution as vehemently as we used to.   Simply put giving more of the pie to the have nots, probably means less to the haves.  So the next 25 years may look particularly bad for investors.

I'm quite sure that the past 25-year financial returns are more relevant to the next 25 years than what happened back in the Great Depression.  My biggest objection to FireCalc and similar tools is that  I don't think there should be equal weight to all time periods.

Neat take. I appreciated this.

So how do plan for a future that you don't think reflects the past?

I'm not being facetious, if you read this contentious thread you might note I'm depending on flexible income for my future security, not depending on the 4% rule*.

But how do you plan for an investments-based financial future when you project fundamental changes to the economy?

Although, I also have to ask, is the market behaviour in the US fundamentally different from the market behaviour of countries that have more even wealth distribution? Or is that irrelevant because the US market dictates so much of what happens in those other markets? Meaning, the markets of more socialist countries don't take a hit because they're mostly representing what's happening in the broader, unequal markets?

Not an expert on economics, at all, so these might be stupid questions.

*I personally take the 4% rule with a grain of salt because the assumptions are nonsense and it uses made up numbers. At best someone's "anticipated future annual spend" is a very rough estimate based mostly on guesses and feelings, and the calculation presumes that it stays exactly the same plus an exact estimated increase for inflation year over year, which isn't probable.

There's too much noise in the assumptions to get such granular meaningful data differentiating between half a percentage point in withdrawal rates.

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

[wageslave23]

The analogy I'm thinking of is trying to decide what clothes I'm going to wear on October 6, 2052. I can look at historical weather data for my current location for the last 150 yrs. And say well it's never been warmer than 75 degrees, so I don't need a bathing suit. I'll just buy a set of jeans and long sleeve shirt and I should be comfortable or at least have a 95% chance of being comfortable.  But is global warming going to take us to new record highs in 30 yrs? Will I have gained 30 lbs, will I have lost 30 lbs? Will I develop a disorder that causes me to run hotter or colder? Will I be living in a different state or different country? There are just too many variables.  So it's silly to be arguing about what shade of green is best for my long sleeve shirt that I'm going to be wearing in 30 years from now.

[Metalcat]

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

Right???

Like, I'm not an economist, I'm not even particularly well educated in math.

But I am very, very experienced in working with business owners who try to project outcomes and their inputs are heavily influenced by rough estimates based largely on past data and fear.

Isn't the basic principle of all formulas that garbage in= garbage out??

Aren't all projected spending numbers essentially rough estimates? Meaning that all projections are just rough estimates?

That said, I don't think messing with the calculators is useless by any means. And I have spent my fair share of time running simulation after simulation trying to understand risk. And have read just gobs and gobs of Big ERN stuff to wrap my mind around it all as best I can, because again, not an economics or math expert, at all.

Where the calculations helped me most was in understanding the relative impact of risk management approaches.

It was those hours spent with simulations that redirected my focus towards developing easy sources of income over lowering my WR through oversaving in the first place.

I personally found that the more unpredictability there was in the system, the more powerful being flexible about WR was as a hedge, and for my particular circumstances, it's a hell of a lot easier to generate 40K than to cut even 20K, or save an extra million up front.

I've always called the simulations "real math with fake numbers." The actual values aren't nearly as important as their relative value to alternatives.

They're a great tool for calculating the magnitudes of risks and hedges. But I would love to see one of these calculators that actually allows for inputs of the more probably risks, like the impact of unexpected large expenses, increases in spending in late life due to medical/care needs, divorce, etc.

As it is, we all just have to roughly imagine what the long term impact would be, which means more emotion-based rough estimates gumming up the projections.

So I think there's A LOT of value in going over the math in detail. But we have to be realistic about what the math actually represents, no?

[Metalcat]

The analogy I'm thinking of is trying to decide what clothes I'm going to wear on October 6, 2052. I can look at historical weather data for my current location for the last 150 yrs. And say well it's never been warmer than 75 degrees, so I don't need a bathing suit. I'll just buy a set of jeans and long sleeve shirt and I should be comfortable or at least have a 95% chance of being comfortable.  But is global warming going to take us to new record highs in 30 yrs? Will I have gained 30 lbs, will I have lost 30 lbs? Will I develop a disorder that causes me to run hotter or colder? Will I be living in a different state or different country? There are just too many variables.  So it's silly to be arguing about what shade of green is best for my long sleeve shirt that I'm going to be wearing in 30 years from now.

Very much so, but in this analogy, a weather prediction simulator might be great for you projecting the risks of wearing black in the sun or not having proper rain gear, or just how much benefit merino wool has in multiple climates.

It can't tell you what to wear on October 2052, but it can tell you that you that the benefit of planning to wear arctic level gear in case of cold isn't nearly as beneficial a hedge as packing layers of merino wool and a thin waterproof top layer.

Hilariously, I literally just did this. I moved for several months to a climate that is famous for being entirely unpredictable, and had to pack for every weather scenario in one duffle bag. Having a solid understanding of how to mitigate different weather risks with the least amount of stuff was not dissimilar to hedging against unpredictable financial risks.

Anything could happen. How do we prepare for anything without wasting precious resources???

It's the same way the simulations can't project the future, but can show someone that generating just 5-10K of income most years up to a certain age may have more impact than working full time an extra few years.

It helps refine our intuitive understanding of relative risks and the impact of various hedging strategies.

[nereo]

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

I agree with this... mostly.  The main tweak I'd make is to "save up a crop ton of money and establish your layers of flexibility well in advance", and then be willing to be flexible going foward

It's very difficult and/or absurdly costly to deal with threats after they have occurred. But you can set up "layers of safety' fairly easily and often with minimal expense if you choose to do it well in advance.

[dividendman]

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

I agree with this... mostly.  The main tweak I'd make is to "save up a crop ton of money and establish your layers of flexibility well in advance", and then be willing to be flexible going foward

It's very difficult and/or absurdly costly to deal with threats after they have occurred. But you can set up "layers of safety' fairly easily and often with minimal expense if you choose to do it well in advance.

Is anyone who is retiring early not doing this? I find it hard to believe someone being prudent/skilled enough to have 25x their projected yearly spend at an early age is just going to do a 4%+inflation withdrawal blindly and YOLO it.

That being said, they probably could. It just seems the self-selected sample of people here just won't. It's in our nature to plan, analyze, be productive, etc. Even the thread about flexibility shows that.

It's a lot different than someone winning the lotto for 25x expenses.

[nereo]

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

I agree with this... mostly.  The main tweak I'd make is to "save up a crop ton of money and establish your layers of flexibility well in advance", and then be willing to be flexible going foward

It's very difficult and/or absurdly costly to deal with threats after they have occurred. But you can set up "layers of safety' fairly easily and often with minimal expense if you choose to do it well in advance.

Is anyone who is retiring early not doing this? I find it hard to believe someone being prudent/skilled enough to have 25x their projected yearly spend at an early age is just going to do a 4%+inflation withdrawal blindly and YOLO it.

That being said, they probably could. It just seems the self-selected sample of people here just won't. It's in our nature to plan, analyze, be productive, etc. Even the thread about flexibility shows that.

It's a lot different than someone winning the lotto for 25x expenses.

It seems the primary criticism of people's FIRE strategies both on this thread and over on the "stop worrying about 4%" is that using many of these strategies constitutes a "failure" of some sort (under the logic that one did not save enough money ... i.e. 4% is not "safe" for recent retirees or for future ones).

That said I've personally never encounter a retiree who never changed their spending based on the broader economy nor never earned additional money nor relied on things outside their retirement nest-egg.  It makes the entire discussion somewhat theoretical.

[Metalcat]

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

I agree with this... mostly.  The main tweak I'd make is to "save up a crop ton of money and establish your layers of flexibility well in advance", and then be willing to be flexible going foward

It's very difficult and/or absurdly costly to deal with threats after they have occurred. But you can set up "layers of safety' fairly easily and often with minimal expense if you choose to do it well in advance.

Is anyone who is retiring early not doing this? I find it hard to believe someone being prudent/skilled enough to have 25x their projected yearly spend at an early age is just going to do a 4%+inflation withdrawal blindly and YOLO it.

That being said, they probably could. It just seems the self-selected sample of people here just won't. It's in our nature to plan, analyze, be productive, etc. Even the thread about flexibility shows that.

It's a lot different than someone winning the lotto for 25x expenses.

It seems the primary criticism of people's FIRE strategies both on this thread and over on the "stop worrying about 4%" is that using many of these strategies constitutes a "failure" of some sort (under the logic that one did not save enough money ... i.e. 4% is not "safe" for recent retirees or for future ones).

That said I've personally never encounter a retiree who never changed their spending based on the broader economy nor never earned additional money nor relied on things outside their retirement nest-egg.  It makes the entire discussion somewhat theoretical.

Hence how we got into a whole tangent about what constitutes "retirement" and who should be allowed to use that term.

There is a very specific population within the FIRE community who, as you said, consider all of those risk-management options to be failures, but never consider adding in more full-time working years to be a failure.

The issue is not what they define as failure for themselves, but what they seem to insist amounts to failure for *everyone*. The issue seems to always come back to the definition of retirement, and we never collectively agree on that.

So yeah, it's all theoretical and largely semantic.

But that doesn't mean we can't discuss plans and the risks inherent to those plans. Regardless of what we call it, we can absolutely analyze the relative risk of anyone's plan who has quit during The Great Resignation.

[GuitarStv]

I think the original MMM article about the 4% rule applies here.

https://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

It discusses pretty clearly how an early retiree needs to be willing to change spending patterns in retirement if they want to be safe with the 4% rule, but if they're willing to do that then the odds are on their side.  He also discusses the dangers of blindly following a 4% rule in retirement.

[bryan995]

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

I agree with this... mostly.  The main tweak I'd make is to "save up a crop ton of money and establish your layers of flexibility well in advance", and then be willing to be flexible going foward

It's very difficult and/or absurdly costly to deal with threats after they have occurred. But you can set up "layers of safety' fairly easily and often with minimal expense if you choose to do it well in advance.

Is anyone who is retiring early not doing this? I find it hard to believe someone being prudent/skilled enough to have 25x their projected yearly spend at an early age is just going to do a 4%+inflation withdrawal blindly and YOLO it.

That being said, they probably could. It just seems the self-selected sample of people here just won't. It's in our nature to plan, analyze, be productive, etc. Even the thread about flexibility shows that.

It's a lot different than someone winning the lotto for 25x expenses.

25x expenses IS 4% SWR.  They are the same thing.
If they are willing to make due with less (3% SWR) then they have 33x expenses.

I tried to make the point earlier, but I think the one thing often overlooked is that the average MMM (semi frugal) retiree has minimal capacity to adjust spending down.  This adds risk.
When you start with a tight budget, by definition you have less room to trim/optimize as issues arise.

Now you have no choice but to increase your expenses + SWR as inflation/poor-market-returns become recurrent, and your risk of failure increases.

Maybe most MMM retires actually have 50-60x a bare-bones level of expenses? Who knows.
Talking about x-fold of expenses in a stash is somewhat irrelevant unless you also have a measure of how elastic ones spend could be in troubling times, no?

I dare to say that retiree A with 25x, 100k spend (2.5M, 4% SWR))is orders of magnitude more elastic and risk free than retiree B with 25x, 50k spend (1.25MM, 4%SWR).
If a bare-bones retirement costs 30k, then retiree A actually has 83.3x (1.2% SWR) and retiree B has 41.6x (2.4% SWR).

TLDR; SWR should be normalized to a bare-bones / MMM approved level of expenses. 

[Metalcat]

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

I agree with this... mostly.  The main tweak I'd make is to "save up a crop ton of money and establish your layers of flexibility well in advance", and then be willing to be flexible going foward

It's very difficult and/or absurdly costly to deal with threats after they have occurred. But you can set up "layers of safety' fairly easily and often with minimal expense if you choose to do it well in advance.

Is anyone who is retiring early not doing this? I find it hard to believe someone being prudent/skilled enough to have 25x their projected yearly spend at an early age is just going to do a 4%+inflation withdrawal blindly and YOLO it.

That being said, they probably could. It just seems the self-selected sample of people here just won't. It's in our nature to plan, analyze, be productive, etc. Even the thread about flexibility shows that.

It's a lot different than someone winning the lotto for 25x expenses.

25x expenses IS 4% SWR.  They are the same thing.
If they are willing to make due with less (3% SWR) then they have 33x expenses.

I tried to make the point earlier, but I think the one thing often overlooked is that the average MMM (semi frugal) retiree has minimal capacity to adjust spending down.  This adds risk.
When you start with a tight budget, by definition you have less room to trim/optimize as issues arise.

Now you have no choice but to increase your expenses + SWR as inflation/poor-market-returns become recurrent, and your risk of failure increases.

Maybe most MMM retires actually have 50-60x a bare-bones level of expenses? Who knows.
Talking about x-fold of expenses in a stash is somewhat irrelevant unless you also have a measure of how elastic ones spend could be in troubling times, no?

I dare to say that retiree A with 25x, 100k spend (2.5M, 4% SWR))is orders of magnitude more elastic and risk free than retiree B with 25x, 50k spend (1.25MM, 4%SWR).
If a bare-bones retirement costs 30k, then retiree A actually has 83.3x (1.2% SWR) and retiree B has 41.6x (2.4% SWR).

TLDR; SWR should be normalized to a bare-bones / MMM approved level of expenses.

I've personally seen a lot more massive spending budgets here than lean budgets. I've also seen a lot of future spending estimates with tons of padding built in.

So they run the calculation on a 4% spend, but in reality may never hit that full spend, because they've erred on the side of estimating the high end of what their expenses are likely to be.

The ones who have lean budgets tend to be quite aware of it and tend to be, like Pete, the ones who would prefer to pick up part time work down the line than stay in their day-job.

There's no question, the 4% rule sky-rockets in risk the leaner and less flexible your budget is. That's why it's a starting point, not an ending point.

You're absolutely right. Someone with a calculated WR of 4%, but whose budget is unrealistically high is potentially way more secure than someone who calculates a WR of 3% with an unrealistically low budget.

I always use a spend of 60K for my estimated, even though we often don't hit that but easily can. If I base my WR percentage on that, my calculations are all off.

Likewise, if Joe the artist who lives in a tree (real dude, fake name) calculates his lifetime annual budget as $7000, and has 350K saved (he doesn't), then he inputs a 2% WR.

Obviously Joe who lives in a tree is in no way more secure than I am. But that's not a failure of "the 4% rule" that's a demonstration of how unreliable the outputs are based on the assumptions underpinning the inputs.

So yeah, the 4% rule is probably much higher risk for the folks over at ERE if they aren't cool with generating income down the line.

The 4% rule is probably a mixed bag of WAY too conservative to WAY too risky for the folks over at BH, but that will entirely depend on their capacity to cut their massive budgets. Some huge budgets are quite fixed.

The 4% rule is, on average, a really great starting point, but more conservative than it seems for most people here, largely because of the very common budget padding that I see here, which is actually the opposite of the lean-budget problem.

Although, the population here is in flux at the moment. I have admitted already that the sea of conservative budgeters with 2% WRs, cash reserves, paid of 7 figure houses, and rental properties are steadily disappearing. So I may have to adjust my perception of what the typical "mustachian" actually looks like moving forward.

[clifp]

Neat take. I appreciated this.

So how do plan for a future that you don't think reflects the past?

I'm not being facetious, if you read this contentious thread you might note I'm depending on flexible income for my future security, not depending on the 4% rule*.

But how do you plan for an investments-based financial future when you project fundamental changes to the economy?

Although, I also have to ask, is the market behaviour in the US fundamentally different from the market behaviour of countries that have more even wealth distribution? Or is that irrelevant because the US market dictates so much of what happens in those other markets? Meaning, the markets of more socialist countries don't take a hit because they're mostly representing what's happening in the broader, unequal markets?

Not an expert on economics, at all, so these might be stupid questions.

*I personally take the 4% rule with a grain of salt because the assumptions are nonsense and it uses made up numbers. At best someone's "anticipated future annual spend" is a very rough estimate based mostly on guesses and feelings, and the calculation presumes that it stays exactly the same plus an exact estimated increase for inflation year over year, which isn't probable.

There's too much noise in the assumptions to get such granular meaningful data differentiating between half a percentage point in withdrawal rates.

They are certainly not dumb questions, and wish I was smarter/wiser to give betters answer your good ones

The main points I've been making on this forum over the last 7 or 8 years.

1. 4% SWR is fine for normal retirement not for early.  I believe we are in violent agreement on that.
2. Bonds suck, or as I've said quoting Buffett, they "offer return free risk."
3. The implications of bond's sucking is that when  bear market hits, bonds will go down not up and there is nothing to cushion the fall of stocks.
Now this was no great prophecy on my part. But I got some push back on the forum, and it is certainly fair to say, like stop clocked, Clif is right once a a decade.
4. I believe that financial assets alone are not sufficient diversification for an early retirement. I think this runs contrary to the "stop worrying about the 4% rule thread"

I've been greatly influenced in my thinking by the Yale Endowment AA, which a couple of years ago had a massive 2.5% of their assets in the domestic stock market and 7.5% in bonds, and the remaining 90% in everything from timber, Venture Capital funds, hedge funds, commodities.

The much harder question is what should I invest instead.  A side gig, or side business, are perfectly fine way of providing an alternative income stream. They don't personally meet my definition of retirement, but that's my issue not yours. I rather have government pension, than a side gig, but I rather have a side gig than have 100% of my income depend on stocks and bonds..

I think that real estate is the most practical option for most folks on the forum.

I personally have done direct real estate invest, syndicate real estate investing, angel investing, hard money lending on real estate, inventory lending and small bit of gold. None have outperformed stocks over the last 13 years, although by the end of the bear market this could change.

I'm not saying don't use calculators.  I just think it is virtually impossible for the US to have another great depression without an external trigger, war, climate disaster, alien invasion.  So that fact that my portfolio will last through the Great Depression doesn't give much comfort.  Will it survive the Great Hack where trillions of dollars are transfer from investor to hackers is much bigger concern.  There is physical paper deed in offices saying I own various properties, my record of owning VTI is all electronic.

[Villanelle]

Fair, but the 4% rule isn't based off of unusually high US market returns of the last 25 years, so wouldn't that be baked in? Feel free to correct me.

The world is constantly changing, and the rate of change is arguable increasing not decreasing.  It is certainly comforting to say that based on 150 years of stock and bond returns, the two worse periods are the Great Depression and stagflation of 1970s, and my 40 or 50+ year retirement isn't going to have 30 year period worse than those two periods.  But is it true?

I'm by nature an optimist, but living through the Covid (so far) and Trump presidency I'm less so.  We face some unique challenges, the threats to our democracy, and climate change are two that previous generations have not faced since 1861 and never.

I bring up the last 25 years because capital returns have been unusually good.  We also see increasing pressure for labor to get more of the pie, and inequality to be reduced.  Now while this is far from unique in American history, I see increasing support for this, including by myself.  I used to be the rare guy on forum, who was so staunchly laisse-fair capitalism, that I'd defend oil and drug companies.  But even I and many of my wealthy friends don't oppose higher taxes on rich folks/corporations,  government regulation of dominant companies, and some wealth distribution as vehemently as we used to.   Simply put giving more of the pie to the have nots, probably means less to the haves.  So the next 25 years may look particularly bad for investors.

I'm quite sure that the past 25-year financial returns are more relevant to the next 25 years than what happened back in the Great Depression.  My biggest objection to FireCalc and similar tools is that  I don't think there should be equal weight to all time periods.

Neat take. I appreciated this.

So how do plan for a future that you don't think reflects the past?

I'm not being facetious, if you read this contentious thread you might note I'm depending on flexible income for my future security, not depending on the 4% rule*.

But how do you plan for an investments-based financial future when you project fundamental changes to the economy?

Although, I also have to ask, is the market behaviour in the US fundamentally different from the market behaviour of countries that have more even wealth distribution? Or is that irrelevant because the US market dictates so much of what happens in those other markets? Meaning, the markets of more socialist countries don't take a hit because they're mostly representing what's happening in the broader, unequal markets?

Not an expert on economics, at all, so these might be stupid questions.

*I personally take the 4% rule with a grain of salt because the assumptions are nonsense and it uses made up numbers. At best someone's "anticipated future annual spend" is a very rough estimate based mostly on guesses and feelings, and the calculation presumes that it stays exactly the same plus an exact estimated increase for inflation year over year, which isn't probable.

There's too much noise in the assumptions to get such granular meaningful data differentiating between half a percentage point in withdrawal rates.

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

Isn't that exactly what most people--even those who cite the 4% rule--plan?  I generally base our plans around the 4% rule because without that, I'd have no idea if we need to be in the area of $500k or $5million.  For me, that was actually the most transformative knowledge I got from MMM.  Before his blog post, I'd never heard of the 4% rule and retirement planning was entirely overwhelming because I had absolutely no idea how to create even a rough estimate of what we'd need.   But I also recognize that it isn't an exact science, and blindly following 4% as though it is some exact algorithm that will guarantee success isn't sensible. It's a guideline to point someone in the right direction, not a guarantee. 

[tooqk4u22]

Back on topic a bit...the 21-22 fire folk will likely be in trouble absent more work, less spending or combination thereof.

Let's set aside 4% SWR or AA mix or any other aspects that have been well researched or debated.....

.....and dumb it down to a fundamental truth...REVERSION TO THE MEAN!

Pre-pandemic in 2019 up to Feb 2020, most viewed the market as highly valued (possibly outside the mean) where interest rates were really low (who knew they could go lower) and earnings were slowing with prospects of a recession in 2020. 

Pandemic hits, economy closes, markets crash for days...

Government and Fed put trillions in basically overnight and make rates zero, markets (stocks and bonds) skyrocket and go way way outside the mean....and due to all the money in people's pockets it pulled forward demand for just about everything....bam, inflation.  And yeah there were major, and still are minor, supply chain issues but we have basically been spending like mad for over two years....a lot of that is pull forward.

Now the fiscal stimulus is burning down out of people's accounts and the Fed is raising rates fast and slowly (imean really F'ing slowly) is pulling out its funds.....bam, start to revert back to the mean....bonds are probably close to fairly valued and SP500 should be about 3400-3600 to be back to mean.....problem is that you have to overshoot to actually get to the mean......and that's 2900 to 3100.

Earnings will come down as that pull forward combined with lower balances reduce demand.  Multiples will go down as rates rise a bit more and recessionary forces start cracking, if they haven't already.  We will go back to fending off low growth and possible deflation later next year and fed will have to cut rates again.   

But it will suck between now and then.

[AlanStache]

...
But it will suck between now and then.

aka be a good time to buy the market if you can.

[tooqk4u22]

...
But it will suck between now and then.

aka be a good time to buy the market if you can.

No doubt.    SP500 at 3000 would be about 38% down from peak and for someone who fired at peak with 4% wr would be 6.4%/15x at that level and back up to 3500 would be 5.6%/18x....neither are good.

[eyesonthehorizon]

The pandemic accelerated our FI plans. The rich, broke or dead calculators that showed me I was 4x more likely to be dead rather than broke* was the final straw. Besides, if the world really is going to hell in a handbasket, wouldn't I be better off building strong local connections and trying to effect change in my community than working more in the hopes that a slightly fatter stash is going to save me? I'm not a billionaire, I can't buy my own island, I need to commit to the people and place that I live with.

*where 'broke' means living on the state pension and where we will still be better off than a lot of people because we have a paid-off house.

I'm late saying so, but this post gives me hope for humanity.

Back on the topic, adding my anecdata - according to the math I could have pulled the plug before COVID, but both wanted to move & had a hunch local MCOL costs were about to rise sharply, so decided to trade part of savings for a reduction in future housing expenses first (taking on very cheap debt in the process - so far this bet seems to have worked out.) I've ended up OMYing twice since then during the pandemic. In part, the very social face-to-face things I wanted to do in the early days of RE were on hold anyway, & working remotely somewhat reduced the intense suck associated with my job, but I'd be lying if I said it wasn't about significant fear.

I'm glad that it gave me a chance to continue contributing into the present dip - I did not want to quit into the tail of a long bull run. The relief of almost a dozen fewer hours in the motor-throne-gauntlet car commute each week has also given me time to consider the prospect of other, less intense work rather than pushing to the finish line & quitting cold-turkey, which seemed so necessary before, & for all the reasons already addressed in this thread is a better cure to SORR fears:

...Time can be harnessed to dramatically amplify the value of your savings.

So say you have a soul/body destroying corporate job and you save about 1M by your mid 30s. You live on 40K/yr.

You "retire" and need that 'stache to support you forever including an increase in health costs later on.

You could work a few more years and pump that 'stache up to 1.25M and create a negligible difference in your long-term SORR risk.

Or, assuming your professional skills are useless to you (unlikely), you could retrain in an area you enjoy and work casually to generate 20-40K/yr while just keeping yourself busy and engaged in your life. ...

(Except for a smaller 'stache & much lower lifestyle spending this could have been written directly about/ to me. I do mostly lose access to my profession if I quit, but also part-time is inconceivable in our workaholic professional culture, so retraining is probably the way forward. That idea felt impossible a couple of years ago: I was running so far in the red I thought I'd be laid flat out for a few years if I stepped away from the constant cortisol rush propping me upright through sheer internal pressure. I'm still pushing through unresolved burnout now, but I think the active infliction of damage is mostly halted. Figuring out what I want to learn still feels like an impossible ask - but actually learning it does not. I just need a divinely revealed epiphany of profitable vocation... or some way to try new things on very limited spare time with very minimal spare energy. :/ )

OM-OMY still calls, though. I'm between MMM & ERE on the expense front; I can only expect my spending to increase from here. Despite inflation, my total outflows (about half to housing, now mostly locked-in) have hardly changed in years, but I've had mostly good health, which I can't rely on to last forever while aging. There are no family resources or pensions for me to expect later. Owning a roof brings new liabilities I have little experience with & our climate is already getting weird.

So I've stuck it out mostly because I don't have the confidence in my ability to earn out soon enough on the opportunity cost of quitting, & don't want to hate myself later - either over a bad outcome (even if it's mostly luck) or a badly-made decision (made while my thinking was still clouded by the heavy "fog of work," as Nords put it.) Nonetheless, I'm enthusiastic for anyone here who did manage to FIRE in the last two years. I rarely recall reading & thinking someone's declared 'stache was too small to bear market risk. Instead I remember thoughts that a poster's expenses sometimes seemed high (which is a layer of safety in disguise, assuming they're mustachian enough to cut down in response to need.)

[clifp]

...
But it will suck between now and then.

aka be a good time to buy the market if you can.

No doubt.    SP500 at 3000 would be about 38% down from peak and for someone who fired at peak with 4% wr would be 6.4%/15x at that level and back up to 3500 would be 5.6%/18x....neither are good.

If I had cash,  I don't, I still wouldn't invest more than 1/2 now. I'd wait for another 10% drop to deploy the next 25%, and another 10% drop to deploy the last 10%.

Now, it is not particularly important if my attempt to time the market is foolish or wise.  I just doubt that I'm only person who is concerned that market has further to fall. So while it is a certainly better time to buy now, than a year ago, I truly have no idea if next Oct is better or worse time.

[Metalcat]

The pandemic accelerated our FI plans. The rich, broke or dead calculators that showed me I was 4x more likely to be dead rather than broke* was the final straw. Besides, if the world really is going to hell in a handbasket, wouldn't I be better off building strong local connections and trying to effect change in my community than working more in the hopes that a slightly fatter stash is going to save me? I'm not a billionaire, I can't buy my own island, I need to commit to the people and place that I live with.

*where 'broke' means living on the state pension and where we will still be better off than a lot of people because we have a paid-off house.

I'm late saying so, but this post gives me hope for humanity.

Back on the topic, adding my anecdata - according to the math I could have pulled the plug before COVID, but both wanted to move & had a hunch local MCOL costs were about to rise sharply, so decided to trade part of savings for a reduction in future housing expenses first (taking on very cheap debt in the process - so far this bet seems to have worked out.) I've ended up OMYing twice since then during the pandemic. In part, the very social face-to-face things I wanted to do in the early days of RE were on hold anyway, & working remotely somewhat reduced the intense suck associated with my job, but I'd be lying if I said it wasn't about significant fear.

I'm glad that it gave me a chance to continue contributing into the present dip - I did not want to quit into the tail of a long bull run. The relief of almost a dozen fewer hours in the motor-throne-gauntlet car commute each week has also given me time to consider the prospect of other, less intense work rather than pushing to the finish line & quitting cold-turkey, which seemed so necessary before, & for all the reasons already addressed in this thread is a better cure to SORR fears:

...Time can be harnessed to dramatically amplify the value of your savings.

So say you have a soul/body destroying corporate job and you save about 1M by your mid 30s. You live on 40K/yr.

You "retire" and need that 'stache to support you forever including an increase in health costs later on.

You could work a few more years and pump that 'stache up to 1.25M and create a negligible difference in your long-term SORR risk.

Or, assuming your professional skills are useless to you (unlikely), you could retrain in an area you enjoy and work casually to generate 20-40K/yr while just keeping yourself busy and engaged in your life. ...

(Except for a smaller 'stache & much lower lifestyle spending this could have been written directly about/ to me. I do mostly lose access to my profession if I quit, but also part-time is inconceivable in our workaholic professional culture, so retraining is probably the way forward. That idea felt impossible a couple of years ago: I was running so far in the red I thought I'd be laid flat out for a few years if I stepped away from the constant cortisol rush propping me upright through sheer internal pressure. I'm still pushing through unresolved burnout now, but I think the active infliction of damage is mostly halted. Figuring out what I want to learn still feels like an impossible ask - but actually learning it does not. I just need a divinely revealed epiphany of profitable vocation... or some way to try new things on very limited spare time with very minimal spare energy. :/ )

OM-OMY still calls, though. I'm between MMM & ERE on the expense front; I can only expect my spending to increase from here. Despite inflation, my total outflows (about half to housing, now mostly locked-in) have hardly changed in years, but I've had mostly good health, which I can't rely on to last forever while aging. There are no family resources or pensions for me to expect later. Owning a roof brings new liabilities I have little experience with & our climate is already getting weird.

So I've stuck it out mostly because I don't have the confidence in my ability to earn out soon enough on the opportunity cost of quitting, & don't want to hate myself later - either over a bad outcome (even if it's mostly luck) or a badly-made decision (made while my thinking was still clouded by the heavy "fog of work," as Nords put it.) Nonetheless, I'm enthusiastic for anyone here who did manage to FIRE in the last two years. I rarely recall reading & thinking someone's declared 'stache was too small to bear market risk. Instead I remember thoughts that a poster's expenses sometimes seemed high (which is a layer of safety in disguise, assuming they're mustachian enough to cut down in response to need.)

You do not need this.

It took me two years of retirement to figure out what I wanted to do, and I tried out about a half dozen things along the way. Failed miserably and SPECTACULARLY at one of them.

I'm reading a great book right now called "range" all about how people undervalue the critical sampling phase of accomplishment.

Whatever path you took to your current career didn't work out well because it's burning you out. That means that for complex reasons, you learned to lean way too much into using resources that you don't really have. You learned to shape yourself to your job-box, not figure out how to find work that was shaped for you.

You have to sort of relearn how to figure out what you want to do.

Go back to the drawing board and start sampling again, but do it with a different intention. Instead of approaching it with "what do I need to do to be good at this work" try and figure out what skills you naturally thrive doing, what environments you naturally work well in, and what useful skills you can carry with you from each thing you try.

You don't have the resources right now to figure out what next. It doesn't work that way. It's going to take time, and investment in getting to know yourself and testing your capacities and abilities.

I can tell you this though. If you think part time work is hard to come by, you aren't seeing an entire world of possibilities. There might not be a lot of part time "jobs" but there are endless possibilities for part time paid work, in virtually every industry.

Every single company has gaps of talent that they could really benefit from, but can't afford to fully hire. You just have to learn who would value a bit of your skills the most and make yourself available to them.

Assuming you're cool with new skills, then the world of part time work is, IME, larger, more diverse, and more dynamic than the world of full time jobs. Full time jobs tend to be quite limited and constrained to a more predictable structure. Flexible jobs is really a better name for it than part time, because it's more like work that *can* be done part time, and they tend to be almost limitless in what they can entail and what structure they can take.

In the end, there's no rush to figure this shit out. You have plenty of money and can take your sweet time doing it.

All you need is a rough target of what you want to be able to generate. Then take whatever time you need to figure out the most optimal way to do so. Don't neglect the sampling period, it's what allows you to develop the skills and judgement you need to understand what your available assets are and how best to utilize them.

This isn't something to stress about (although you will), it's an opportunity to figure out what you are *actually* good at. And I don't mean what job you can force yourself to perform well at. But what work is genuinely challenging and a good use of your capacities.

It exist, but it's not easy to find. It takes a lot of sampling and understanding yourself.

[clifp]

OM-OMY still calls, though. I'm between MMM & ERE on the expense front; I can only expect my spending to increase from here. Despite inflation, my total outflows (about half to housing, now mostly locked-in) have hardly changed in years, but I've had mostly good health, which I can't rely on to last forever while aging. There are no family resources or pensions for me to expect later. Owning a roof brings new liabilities I have little experience with & our climate is already getting weird.

So I've stuck it out mostly because I don't have the confidence in my ability to earn out soon enough on the opportunity cost of quitting, & don't want to hate myself later - either over a bad outcome (even if it's mostly luck) or a badly-made decision (made while my thinking was still clouded by the heavy "fog of work," as Nords put it.) Nonetheless, I'm enthusiastic for anyone here who did manage to FIRE in the last two years. I rarely recall reading & thinking someone's declared 'stache was too small to bear market risk. Instead I remember thoughts that a poster's expenses sometimes seemed high (which is a layer of safety in disguise, assuming they're mustachian enough to cut down in response to need.)

I can really empathize with you. For me my stache over $3 million and getting close to $4 at one point was too big to realistically say you don't have enough to retired. However, the fear of would have ever been able to earn the same as I was making was real.  Like you and I didn't have the confidence that I could.  In Silicon Valley, I knew with my experience and credentials I wouldn't have a hard time find a job in the valley.  In Hawaii, with no network, I knew it would be much more difficult.   I'm not sure I would have had the guts to quit with under $2 million. I didn't look hard for a job in Hawaii, but the ones there were offered/available were very much low pay, no control, not very interesting, and even though I was doing similar volunteer work, I would have hated them even as $15-20 hour.  I never got taken up on my offers to work for startups, for low pay, but a lot of equity.  So depending on your post retirement plans, I don't think your fear is irrational.

Malcat

You do not need this.

It took me two years of retirement to figure out what I wanted to do, and I tried out about a half dozen things along the way. Failed miserably and SPECTACULARLY at one of them.

I'm reading a great book right now called "range" all about how people undervalue the critical sampling phase of accomplishment.

On the other hand, I really think Malcat is on to something here.

A couple of weeks, I attend a seminar put on by the Intel Alumni group on consulting. I didn't care that much about consulting, but since I knew all three panelist, in fact "Bill" spend a few years sitting across from me.  It was eye opening for me.  Especially when Bill starting talking about you should be shooting for $500K/year as consulting and even $1 million a year isn't out of the question.  He then explain how you can convince clients to pay $50K for a project that my only take you 50-100 hours.  Now the woman, probably isn't make that kind of money as wedding photographer and insurance consulted but I'm sure she was still making way north of $100/hour.

The thing that was really encouraging, was while these were smart, and personable folks. They were not superstars, in fact they were all a rung below me in the organization.


Also just throw this out there, is there any way you could take a leave of absence of 3 to 12 months?  I did it and it greatly reduce my fear of making a mistake.

[EscapeVelocity2020]

Great posts from Malcat and Clifp!  Got me thinking about a very complicated thing...  not all OMY's are equal.  This has become a hot topic now that markets and inflation have turned against the Early Retiree (SORR) but how do we even discuss when OMY is good vs. bad?

Why is OMY such a complicated topic?  Well, first of all, OMY means a lot of different things to different people, so there's that.  But let's just assume OMY means OMY of continued employment with current employer.

There's also the starting circumstances - one person's OMY helps meaningfully pad the 'stache beyond barebones expenses or above 4% WR, defers pulling from the portfolio, covers family healthcare, etc.  Another person's OMY is a meaningless drop in the 'stache ocean, is a psychological hurdle they don't wish to clear, or happens so close to 'normal retirement' that they are practically indistinguishable.

But another, harder OMY facet is how to evaluate it's value for an individual.  There is probably an objective positive OMY value (delta NW from working) we could come to if we spent enough time figuring out how much we'd save at by the end of the year (saving after taxes, added expenses (like commuting) vs. expenses we'd dodge (like buying ACA healthcare)), extra 401k and IRA savings)...  But there is also a significant subjective value to OMY.  Not worrying when the market will bottom (at least if you are in accumulation, you are still contributing and spending income while you wait out the recovery), etc.

So I don't really know how we can advise others about if OMY is a good idea for them or not.  We don't know the future and we'd have to know a whole lot about their circumstances (i.e. Family situation, NW, household expenses, retired expenses, health, current income, benefits package, how much they hate their job, what their raise will be, what the future of the stock market will be, future inflation rate, what their raise will be....).

TL;DR - I think we've found the limit of this forum's usefulness - we're all on our own when it comes to figuring out that OMY conundrum! 

[Villanelle]

The pandemic accelerated our FI plans. The rich, broke or dead calculators that showed me I was 4x more likely to be dead rather than broke* was the final straw. Besides, if the world really is going to hell in a handbasket, wouldn't I be better off building strong local connections and trying to effect change in my community than working more in the hopes that a slightly fatter stash is going to save me? I'm not a billionaire, I can't buy my own island, I need to commit to the people and place that I live with.

*where 'broke' means living on the state pension and where we will still be better off than a lot of people because we have a paid-off house.

I'm late saying so, but this post gives me hope for humanity.

Back on the topic, adding my anecdata - according to the math I could have pulled the plug before COVID, but both wanted to move & had a hunch local MCOL costs were about to rise sharply, so decided to trade part of savings for a reduction in future housing expenses first (taking on very cheap debt in the process - so far this bet seems to have worked out.) I've ended up OMYing twice since then during the pandemic. In part, the very social face-to-face things I wanted to do in the early days of RE were on hold anyway, & working remotely somewhat reduced the intense suck associated with my job, but I'd be lying if I said it wasn't about significant fear.

I'm glad that it gave me a chance to continue contributing into the present dip - I did not want to quit into the tail of a long bull run. The relief of almost a dozen fewer hours in the motor-throne-gauntlet car commute each week has also given me time to consider the prospect of other, less intense work rather than pushing to the finish line & quitting cold-turkey, which seemed so necessary before, & for all the reasons already addressed in this thread is a better cure to SORR fears:

...Time can be harnessed to dramatically amplify the value of your savings.

So say you have a soul/body destroying corporate job and you save about 1M by your mid 30s. You live on 40K/yr.

You "retire" and need that 'stache to support you forever including an increase in health costs later on.

You could work a few more years and pump that 'stache up to 1.25M and create a negligible difference in your long-term SORR risk.

Or, assuming your professional skills are useless to you (unlikely), you could retrain in an area you enjoy and work casually to generate 20-40K/yr while just keeping yourself busy and engaged in your life. ...

(Except for a smaller 'stache & much lower lifestyle spending this could have been written directly about/ to me. I do mostly lose access to my profession if I quit, but also part-time is inconceivable in our workaholic professional culture, so retraining is probably the way forward. That idea felt impossible a couple of years ago: I was running so far in the red I thought I'd be laid flat out for a few years if I stepped away from the constant cortisol rush propping me upright through sheer internal pressure. I'm still pushing through unresolved burnout now, but I think the active infliction of damage is mostly halted. Figuring out what I want to learn still feels like an impossible ask - but actually learning it does not. I just need a divinely revealed epiphany of profitable vocation... or some way to try new things on very limited spare time with very minimal spare energy. :/ )

OM-OMY still calls, though. I'm between MMM & ERE on the expense front; I can only expect my spending to increase from here. Despite inflation, my total outflows (about half to housing, now mostly locked-in) have hardly changed in years, but I've had mostly good health, which I can't rely on to last forever while aging. There are no family resources or pensions for me to expect later. Owning a roof brings new liabilities I have little experience with & our climate is already getting weird.

So I've stuck it out mostly because I don't have the confidence in my ability to earn out soon enough on the opportunity cost of quitting, & don't want to hate myself later - either over a bad outcome (even if it's mostly luck) or a badly-made decision (made while my thinking was still clouded by the heavy "fog of work," as Nords put it.) Nonetheless, I'm enthusiastic for anyone here who did manage to FIRE in the last two years. I rarely recall reading & thinking someone's declared 'stache was too small to bear market risk. Instead I remember thoughts that a poster's expenses sometimes seemed high (which is a layer of safety in disguise, assuming they're mustachian enough to cut down in response to need.)

You do not need this.

It took me two years of retirement to figure out what I wanted to do, and I tried out about a half dozen things along the way. Failed miserably and SPECTACULARLY at one of them.

I'm reading a great book right now called "range" all about how people undervalue the critical sampling phase of accomplishment.

Whatever path you took to your current career didn't work out well because it's burning you out. That means that for complex reasons, you learned to lean way too much into using resources that you don't really have. You learned to shape yourself to your job-box, not figure out how to find work that was shaped for you.

You have to sort of relearn how to figure out what you want to do.

Go back to the drawing board and start sampling again, but do it with a different intention. Instead of approaching it with "what do I need to do to be good at this work" try and figure out what skills you naturally thrive doing, what environments you naturally work well in, and what useful skills you can carry with you from each thing you try.

You don't have the resources right now to figure out what next. It doesn't work that way. It's going to take time, and investment in getting to know yourself and testing your capacities and abilities.

I can tell you this though. If you think part time work is hard to come by, you aren't seeing an entire world of possibilities. There might not be a lot of part time "jobs" but there are endless possibilities for part time paid work, in virtually every industry.

Every single company has gaps of talent that they could really benefit from, but can't afford to fully hire. You just have to learn who would value a bit of your skills the most and make yourself available to them.

Assuming you're cool with new skills, then the world of part time work is, IME, larger, more diverse, and more dynamic than the world of full time jobs. Full time jobs tend to be quite limited and constrained to a more predictable structure. Flexible jobs is really a better name for it than part time, because it's more like work that *can* be done part time, and they tend to be almost limitless in what they can entail and what structure they can take.

In the end, there's no rush to figure this shit out. You have plenty of money and can take your sweet time doing it.

All you need is a rough target of what you want to be able to generate. Then take whatever time you need to figure out the most optimal way to do so. Don't neglect the sampling period, it's what allows you to develop the skills and judgement you need to understand what your available assets are and how best to utilize them.

This isn't something to stress about (although you will), it's an opportunity to figure out what you are *actually* good at. And I don't mean what job you can force yourself to perform well at. But what work is genuinely challenging and a good use of your capacities.

It exist, but it's not easy to find. It takes a lot of sampling and understanding yourself.

 

Maybe I need to start a different thread, but I'm curious about what this "sampling" looked like for you, or what you imagine it to look like when you mention it for others.

It's an intriguing concept, both for myself and for my DH who is facing a major work transition, but is't yet ready to retire. 

[wageslave23]

Great posts from Malcat and Clifp!  Got me thinking about a very complicated thing...  not all OMY's are equal.  This has become a hot topic now that markets and inflation have turned against the Early Retiree (SORR) but how do we even discuss when OMY is good vs. bad?

Why is OMY such a complicated topic?  Well, first of all, OMY means a lot of different things to different people, so there's that.  But let's just assume OMY means OMY of continued employment with current employer.

There's also the starting circumstances - one person's OMY helps meaningfully pad the 'stache beyond barebones expenses or above 4% WR, defers pulling from the portfolio, covers family healthcare, etc.  Another person's OMY is a meaningless drop in the 'stache ocean, is a psychological hurdle they don't wish to clear, or happens so close to 'normal retirement' that they are practically indistinguishable.

But another, harder OMY facet is how to evaluate it's value for an individual.  There is probably an objective positive OMY value (delta NW from working) we could come to if we spent enough time figuring out how much we'd save at by the end of the year (saving after taxes, added expenses (like commuting) vs. expenses we'd dodge (like buying ACA healthcare)), extra 401k and IRA savings)...  But there is also a significant subjective value to OMY.  Not worrying when the market will bottom (at least if you are in accumulation, you are still contributing and spending income while you wait out the recovery), etc.

So I don't really know how we can advise others about if OMY is a good idea for them or not.  We don't know the future and we'd have to know a whole lot about their circumstances (i.e. Family situation, NW, household expenses, retired expenses, health, current income, benefits package, how much they hate their job, what their raise will be, what the future of the stock market will be, future inflation rate, what their raise will be....).

TL;DR - I think we've found the limit of this forum's usefulness - we're all on our own when it comes to figuring out that OMY conundrum!

Well a case study would help. But yes that's the conundrum, 4% or 3% or OMY or barebones means different things to different people.

[EscapeVelocity2020]

Great posts from Malcat and Clifp!  Got me thinking about a very complicated thing...  not all OMY's are equal.  This has become a hot topic now that markets and inflation have turned against the Early Retiree (SORR) but how do we even discuss when OMY is good vs. bad?

Why is OMY such a complicated topic?  Well, first of all, OMY means a lot of different things to different people, so there's that.  But let's just assume OMY means OMY of continued employment with current employer.

There's also the starting circumstances - one person's OMY helps meaningfully pad the 'stache beyond barebones expenses or above 4% WR, defers pulling from the portfolio, covers family healthcare, etc.  Another person's OMY is a meaningless drop in the 'stache ocean, is a psychological hurdle they don't wish to clear, or happens so close to 'normal retirement' that they are practically indistinguishable.

But another, harder OMY facet is how to evaluate it's value for an individual.  There is probably an objective positive OMY value (delta NW from working) we could come to if we spent enough time figuring out how much we'd save at by the end of the year (saving after taxes, added expenses (like commuting) vs. expenses we'd dodge (like buying ACA healthcare)), extra 401k and IRA savings)...  But there is also a significant subjective value to OMY.  Not worrying when the market will bottom (at least if you are in accumulation, you are still contributing and spending income while you wait out the recovery), etc.

So I don't really know how we can advise others about if OMY is a good idea for them or not.  We don't know the future and we'd have to know a whole lot about their circumstances (i.e. Family situation, NW, household expenses, retired expenses, health, current income, benefits package, how much they hate their job, what their raise will be, what the future of the stock market will be, future inflation rate, what their raise will be....).

TL;DR - I think we've found the limit of this forum's usefulness - we're all on our own when it comes to figuring out that OMY conundrum!

Well a case study would help. But yes that's the conundrum, 4% or 3% or OMY or barebones means different things to different people.

Yeah, case studies are good to compare the situation to where they stand vs. the 4% rule, but OMY is a significant step beyond that...

[Metalcat]

Well a case study would help. But yes that's the conundrum, 4% or 3% or OMY or barebones means different things to different people.

Also as I've pointed out many, many times, one person's 4% is very different from another's 4%. "Estimated spend" is too rough an estimate, with too many broad assumptions built in to meaningfully compare two people's version of 4%.

FIRE is a classic Fermi problem where the projections are based on a series of reasonably estimated factors, for a reasonably estimated probably outcome.

But to pretend as though the numbers we're calculating are accurate is nonsense.

What is OMY? One more year. But one more year more than what? One more year more after hitting a savings goal? Well was that savings goal unrealistic or already hedged to death?

One person's 4% could be based on estimates that make it dangerously low. Another person's 4% could be based on a budget so padded that they've already built in tons of safety.

One person's OMY could mean just working to a more reasonable level of savings. Another person's OMY could be so fear based that they've already doubled their original goal, and the added "safety" is virtually meaningless.

People here tend to talk as if they're comparing precisely measures apples to precisely measures apples, when as I said, this has always been a Fermi problem where everyone is comparing rough estimates to rough estimates, and using terms that mean wildly different things to different people.

That doesn't mean these things aren't worth discussing or analyzing, but the discussion becomes virtually meaningless when there's assumed consensus about quantification of terms, and that consensus just doesn't exist.

[Metalcat]

Great posts from Malcat and Clifp!  Got me thinking about a very complicated thing...  not all OMY's are equal.  This has become a hot topic now that markets and inflation have turned against the Early Retiree (SORR) but how do we even discuss when OMY is good vs. bad?

Why is OMY such a complicated topic?  Well, first of all, OMY means a lot of different things to different people, so there's that.  But let's just assume OMY means OMY of continued employment with current employer.

There's also the starting circumstances - one person's OMY helps meaningfully pad the 'stache beyond barebones expenses or above 4% WR, defers pulling from the portfolio, covers family healthcare, etc.  Another person's OMY is a meaningless drop in the 'stache ocean, is a psychological hurdle they don't wish to clear, or happens so close to 'normal retirement' that they are practically indistinguishable.

But another, harder OMY facet is how to evaluate it's value for an individual.  There is probably an objective positive OMY value (delta NW from working) we could come to if we spent enough time figuring out how much we'd save at by the end of the year (saving after taxes, added expenses (like commuting) vs. expenses we'd dodge (like buying ACA healthcare)), extra 401k and IRA savings)...  But there is also a significant subjective value to OMY.  Not worrying when the market will bottom (at least if you are in accumulation, you are still contributing and spending income while you wait out the recovery), etc.

So I don't really know how we can advise others about if OMY is a good idea for them or not.  We don't know the future and we'd have to know a whole lot about their circumstances (i.e. Family situation, NW, household expenses, retired expenses, health, current income, benefits package, how much they hate their job, what their raise will be, what the future of the stock market will be, future inflation rate, what their raise will be....).

TL;DR - I think we've found the limit of this forum's usefulness - we're all on our own when it comes to figuring out that OMY conundrum!

How does a problem being individual and complex make this forum less useful?

That's exactly the benefit of having a large group of people with diverse realities and similar goals to talk to and learn from.

Isn't that the entire point of a community?

But yes, people would be more helpful if they would understand that the numbers we all work with here are relative to the individual they apply to. If we would all approach it with the understanding of it being a Fermi problem, we could discuss the basis of the rough estimates that make up the calculations.

That's exactly what we do in case studies.

[vand]

These last two paragraphs sum things up nicely.  I always smirk when I see people on this forum and ERN trying to get too specific with calculations based on historical returns which may or may not have much predictive value and future withdrawal predictions which are probably even harder to estimate. Just save up a crap ton of money and then be willing to be flexible going forward.

I agree with this... mostly.  The main tweak I'd make is to "save up a crop ton of money and establish your layers of flexibility well in advance", and then be willing to be flexible going foward

It's very difficult and/or absurdly costly to deal with threats after they have occurred. But you can set up "layers of safety' fairly easily and often with minimal expense if you choose to do it well in advance.

Is anyone who is retiring early not doing this? I find it hard to believe someone being prudent/skilled enough to have 25x their projected yearly spend at an early age is just going to do a 4%+inflation withdrawal blindly and YOLO it.

That being said, they probably could. It just seems the self-selected sample of people here just won't. It's in our nature to plan, analyze, be productive, etc. Even the thread about flexibility shows that.

It's a lot different than someone winning the lotto for 25x expenses.

This is all easy enough to say in light of the last few years as FIRE math has become ingrained in personal finance, but actually when you go back just a little further it was generally the case - in my home country at least - that "retirement" absolutely meant you could put your feet up and not worry about managing your pot and being assured a certain inflation adjust living standard for the rest of your days. How? Because retirement usually meant swapping your nestegg for an annuity that would be index linked.   That annuity rates have been pushed way down so that self-managed drawdown strategies effectively replaced them tells you everything you need to know about the tail end risk inherent in drawdown strategies over the last few years. 

Note that I am not advocating for annuities here - but they do present a good yardstick of what is a prudent withdrawal rate if you are self-managing. 

[EscapeVelocity2020]

I can't figure out a good way to respond to Malcat and quote at the same time, but here goes nothing -

How does a problem being individual and complex make this forum less useful?

-  Just looking at this thread, the default advice keeps coming back to something along the lines of 'the 4% Rule barely ever fails and people are flexible'.  But the main question of this thread is basically, are recent retirees in a 4% SWR failure cohort and just how much flexibility is needed?  There's been a lot of postulating as the market has gone up and down, but I'm not getting a sense that we've made any progress on addressing the main question - is this a failure cohort or not?  And if it is starting down the path of failure, how much needs to be done to dodge the bullet?  Maizefolk made an interesting comment that folks in the failure cohort would know early on, but I'm not sure we've hit consensus on the current crop of ER's if their 30 year period will be successful or not.  Of course, it'll eventually get very clear that they are definitely in a failure cohort, if additional shoes drop and wheels fall off, but that's hardly what you come to a forum to be told, that you are now obviously failing.  It also doesn't help if someone is telling you 'you should keep that job OMY' if it turns out, years from now, that you were never in danger of failure. 

You come to the forum in order to use the group's wisdom to tell you what to do in advance of failure and how to avoid it, not to be told in real time that you are more and more likely failing.  Nobody even knows for their own situation when 'failing' has begun or what failing will look like, other than when running out of money 'feels inevitable' which would be way too late.

That's exactly the benefit of having a large group of people with diverse realities and similar goals to talk to and learn from.
-  The size and diversity doesn't offer anything to lower the risk, since none of us have been in a failure cohort, so how are we to know anything helpful to the individual wondering what to do?  We may be offering really bad advice, but with good intentions!

-I'm not sure that getting a boatload of 'case study' style data would help.  Is this a topic that well meaning Mustachians should be advising anyone on?  Maybe trading off that one year of life is a really good idea, although it was a low probability, and we are in the part of the graph where we need to ignore that being dead is more likely than being broke... 

I just read through RootOfGood's latest post, his ~$2.4M NW is down $200k in September.  His expenses are ~$40k/yr.  Even he makes the comment, a few more months like that and maybe we'll start to worry.  But early in the year, his main worry is that he'd oversaved and likely worked much longer than necessary.  That sentiment perfectly encapsulates why advising others on OMY is a fools errand.  It's hard enough, likely impossible, to even know how many (if any) OMY's we should do ourselves.

[Metalcat]

Removed useless long post that I wrote because I misinterpreted a previous point.

[Metalcat]

Maybe I need to start a different thread, but I'm curious about what this "sampling" looked like for you, or what you imagine it to look like when you mention it for others.

It's an intriguing concept, both for myself and for my DH who is facing a major work transition, but is't yet ready to retire.

Definitely new thread territory.

[EscapeVelocity2020]

I think we're talking past each other Malcat.  I'm not saying that this forum has no use, it's bar none great when it comes to FI and ER discussions for example, I'm just finding one area where the forum isn't providing good answers.  Knowing where the limits are is useful.