23: How Much Money Do you Need for Retirement (Does the 4% Rule Really Work?)

<p>🎙 The 4% rule is a common rule of thumb used by financial experts for decades to determine how much money you need for retirement. But it’s not necessarily the best advice for a number of reasons, especially when you’re aiming to FIRE and retire many years earlier than traditional retirement. So why doesn’t the 4% rule work? And how do you then determine how much money you need to be able to retire? 🤔</p> <p><strong>This episode discusses topics like:</strong></p> <p>🌟 The biggest problem with the 4% rule that many financial experts overlook;</p> <p>🌟 Why the 4% rule isn’t the best tool to determine how much money you need for early retirement; and</p> <p>🌟 How to calculate your FIRE number.</p> <p><strong>Links from this episode:</strong></p> <p>Episode transcript and show notes: <a href= "https://www.papermoneyco.com/23-4-rule-retirement">https://www.papermoneyco.com/23-4-rule-retirement</a></p> <p>The 4% rule of thumb for retirement withdrawals: <a href= "https://www.thebalance.com/dont-confuse-these-two-retirement-rules-of-thumb-453920"> https://www.thebalance.com/dont-confuse-these-two-retirement-rules-of-thumb-453920</a></p> <p>How to 4% rule works in retirement: <a href= "https://www.thebalance.com/what-is-the-4percent-rule-in-retirement-2388273"> https://www.thebalance.com/what-is-the-4percent-rule-in-retirement-2388273</a><span class="Apple-converted-space"> </span></p> <p>Aussie HIFIRE: The 4% rule in Australia: <a href= "https://aussiehifire.com/2018/11/21/sequencing-risk-the-trinity-study-and-the-4-rule-in-australia/"> https://aussiehifire.com/2018/11/21/sequencing-risk-the-trinity-study-and-the-4-rule-in-australia/</a><span class="Apple-converted-space"> </span></p> <p>Life expectancy at birth in 1998: <a href= "https://www.cdc.gov/nchs/data/nvsr/nvsr48/nvs48_18.pdf">https://www.cdc.gov/nchs/data/nvsr/nvsr48/nvs48_18.pdf</a><span class="Apple-converted-space"> </span></p> <p>Wade Pfau: Retirement Researcher: <a href= "https://retirementresearcher.com/the-4-rule-and-the-search-for-a-safe-withdrawal