Two Sides of FI What the FIRE Community Gets Wrong - Talking with Karsten Jeske
19 snips
Jul 3, 2022 Karsten Jeske, an economist and creator of the Early Retirement Now blog, shares invaluable insights into the FIRE community's misconceptions about safe withdrawal rates. He critiques popular FIRE calculators, emphasizing the need for personalized strategies and proper context in market conditions. The discussion includes the risks associated with 100% stock portfolios, challenges of relying on dividend stocks, and the importance of financial buffers for peace of mind during retirement. Karsten also reflects on his own experience in post-FIRE life.
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Accumulation vs. Decumulation
- Asset accumulation is simple while decumulation is complex due to sequence of returns risk.
- Small changes in withdrawal rates have huge impacts over long retirements.
FIRE Calculator Hazards
- Simple FIRE calculators often misrepresent probability of success by using irrelevant cohorts.
- Focus on probabilities based on current market conditions and your specific retirement timing.
SWR Toolbox Recommendation
- Use Karsten Jeske's SWR Toolbox, which calculates the safe withdrawal rate based on your inputs.
- It considers supplemental income and future cash flows for a personalized approach.