Optimal Finance Daily - Financial Independence and Money Advice 3374: [Part 2] Rethinking the 4 Percent Safe Withdrawal Rule by Fritz Gilbert of The Retirement Manifesto
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Dec 3, 2025 Explore innovative strategies for retirement withdrawals. A lower 3.3% withdrawal rate enhances sustainability in uncertain markets. Discover the dynamic spending approach that aligns with market performance instead of inflation. Learn about Vanguard's spending limits to improve your financial longevity. Plus, increasing international equity exposure can provide better returns. In today's market, being cautious is key—run your numbers and adjust as needed to secure your financial future!
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Reduce Your Withdrawal Rate To ~3.3%
- Lower your initial withdrawal target to about 3.3% to improve sustainability in today's market.
- Fritz Gilbert recommends this based on Morningstar and Early Retirement Now analyses and his own 3.25% practice.
Personal Use Of A 3.25% Target
- Fritz Gilbert shares he targeted a 3.25% withdrawal rate since retiring 3.5 years ago based on Early Retirement Now's research.
- He credits Karsten (Early Retirement Now) for the detailed Safe Withdrawal Rate series that shaped his approach.
Make Spending Dynamic With Market Returns
- Adjust your yearly spending based on that year's market performance instead of strictly following inflation adjustments.
- Fritz Gilbert updates spending ranges annually using 3%, 3.5%, and 4% multipliers on current balances to set next-year spending.