BiggerPockets Money Podcast

The 4% “Rule” is Wrong for FIRE—Here’s a Better Alternative

14 snips
May 6, 2025
Guest
Tyler Gardner
Tyler Gardner, a former portfolio manager and financial advisor, shares valuable insights on retirement planning. He challenges the 4% rule, arguing its rigid nature might jeopardize financial security for early retirees. Gardner emphasizes the need for flexibility in withdrawal strategies, advocates for a more robust FIRE portfolio, and highlights the importance of having a financial cushion. He also discusses the psychological complexities of retiring early and suggests alternative investment strategies, including a focus on stocks and real estate.
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INSIGHT

4% Rule as a Guideline

  • The 4% rule should be considered a flexible guideline, not a strict rule for annual withdrawals.
  • Withdrawals should vary based on market performance and individual financial needs each year.
ADVICE

Two Years Cash Cushion

  • Save two years of living expenses in liquid cash before retiring to handle market downturns.
  • Use cash reserves to avoid withdrawing during market dips and replenish when markets recover.
INSIGHT

Fear Delays Retirement Decision

  • Many people delay retirement due to fear of financial uncertainty and prefer the known struggle of working.
  • The anxiety about running out of money or finding work later causes prolonged careers.
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