the shockingly simple math behind early retirement reddit

The shockingly simple math behind early retirement reddit series#

The reason for this is that as discussed in this article returns are not smooth and instead vary over time. Which as I said is simple and easy which is always nice, but more importantly it’s almost certainly wrong. The simplest and easiest way to try and figure this out is to put a bunch of assumptions into a compound interest calculator like this one at Moneysmart and let it do the math for you. How much longer it will take to get there though is much more complex. If you want to use a 3% withdrawal rate instead of a 4% rate then the simple math is that you need an extra third of the amount of money you needed previously. And obviously you can do a combination of these two things as well.Īssuming that people want to be living a pretty comfortable life in retirement and don’t want to be starting out with less room to tighten their belt then they will likely be looking to save up more money before declaring FIRE. This means that you can have the same amount of money and retire at the same time as you would have otherwise but on a lower income, or retire later but on the same income you would have wanted at a 4% withdrawal rate but using a 3% withdrawal rate instead.

So if you want to reduce the odds of running out of money in retirement then you need to be using a more conservative withdrawal rate. Which happily enough matches up with what some academic researchers found as well. Obviously the safe withdrawal rate varies somewhat depending on the actual mix of investments but as a generalisation 3% seems to work pretty well across asset allocations where most of the money is in Australian shares.

What we both find is that if you are only looking at Australian investments then you need to be more conservative with your withdrawal rate. I talked about it in this post here and Dan covered it in this post. One thing that has come out of this is that the magical 4% withdrawal rate using only Australian investments has not historically been 100% safe.

The shockingly simple math behind early retirement reddit series#

Dan over at Ordinary Dollar has done some fantastic work with his series and I’d like to think that I’ve contributed something to the FIRE community with my work as well. We encourage you to reach out to us via email or call or text if you have any questions or comments.There’s been a lot of work done recently on sequencing risk and safe withdrawal rates for Australian investors. They are incredibly helpful for us and we take all of your feedback seriously. It would be our honor if you would leave an honest review and rating on iTunes. Hey, did you know that there’s a Pulse Media Network listeners’ group on Facebook? That’s right you can hang out, talk about your favorite podcasts, and even interact with podcasters from the network.

We want to thank each and every one of you for listening to the podcast! Your time and attention are off the hook! Tim’s breakout session at the NNBA 2017 conference The National Nurses in Business Association 2017 conference The Shockingly Simple Math Behind Early Retirement OSU Office of Innovation and Strategic Partnerships Tim is a self-proclaimed “avid curator of curiosity,” as well as the proud father of twin toddlers. Outside of his role at OSU, Tim owns a small real estate firm and volunteers at Flying Horse Farms, a camp for children with serious illnesses that was originally founded by the actor Paul Newman. His latest invention, a visual communication tool for the healthcare team, will be piloted in the Emergency Departments of the Ohio State University Wexner Medical Center and The James Comprehensive Cancer Center. His true passion lies within the development of novel commercial innovations to enhance patient outcomes. Tim’s healthcare experience encompasses neurosurgical research on Tethered Spinal Cord Syndrome, designing clinical spaces, developing educational programs to improve skills of the healthcare workforce in India, and transitioning organizations into new physical locations. Tim has the honor of serving as the first Chief Innovation Officer at The Ohio State University College of Nursing, where he’s also a Clinical Instructor of Practice and a DNP student. On episode 254 of RNFM Radio, we welcome our friend and colleague, Tim Raderstorf, MSN, RN, a nurse innovator who Keith and Ashley had the pleasure of meeting at the 2016 National Nurses in Business Association conference in Las Vegas.